Anti-carbon tax protesters wave signs and chant slogans as they block a westbound lane of the Trans Canada highway near Cochrane, Alta., on April 1, 2024.Claude Lavoie was director-general of economic studies and policy analysis at the Department of Finance from 2008 to 2023. He has represented Canada at Organization for Economic Co-operation and Development meetings.
As carbon price increases, goods delivered with electric vehicles or produced with renewable energy will become cheaper than goods delivered or produced using fossil fuels. Higher emitting firms will want to use less fossil fuel to keep their prices low and remain competitive. This may mean changes such as using more efficient boilers or better insulation. On the consumer side, savings may mean driving less and more fuel-efficient cars.or subsidies, and gives Canadians full freedom of choice.
Carbon pricing does negatively affect some workers. For example, those who have no access to public transit have no alternative but to bear thewith a more energy-efficient one or demand better public transit. Why continue to postpone the inevitable need to adapt? The money from the Canada Carbon Rebate and the gradual increase in the carbon price help alleviate the burden and give people time to adjust.
Although not perfect, carbon pricing seems to be a reasonable approach. But there is no denying it imposes costs on the economy. Why bear these costs? After all, until countries such as India, China and the U.S. do more, global warming will occur whatever Canada does.