P R O S C O N S

Potential increases to government-related expenses (e.g., government facilities and operations)

Sectors of the economy can face cost increases and therefore decreased demand

Potential increases in electricity, heating, and transportation costs can negatively impact low-income households

Substantial revenue generation

Option to fund environmental initiatives with tax revenue

Option to allocate revenues towards government deficit reduction

Revenue redistribution can reduce other taxes (e.g., income tax)

Potential for revenues to fund environmental innovation research

Option to redistribute revenues to low-income households through improved social welfare services

Reduces household vehicle usage

Promotes use of cleaner vehicular technologies and fuels

Incentivizes environmentally-friendly industrial processes

Encourages clean electricity production

Revenues can be used to fund sustainable infrastructure needs for compact urban development

Government finances

Local economy

Equity

Reducing Carbon Emissions

Promoting compact urban development

Government finances

Local economy

Equity

B R I T I S H C O L U M B I A I R E L A N D

The tax is revenue-neutral by law, meaning that revenue gained from the levy must go back into the system to reduce personal and corporate tax.

July 1, 2008 - present

Carbon levels dropped by 16 percent (Beaty et al., 2014).

The tax charges up to $30 per metric tonne of carbon dioxide and has cut more than $760 million in personal and corporate taxes (CESRAN, 2015).

Both provinces are under the same Canadian constitutional law and are governed by Liberal Party leaders; Ontario Premier Kathleen Wynne has shown confidence in the tax.

B.C.’s GDP growth has surpassed the rest of Canada, and its personal and corporate income tax rates have dropped dramatically (Beaty et al., 2014). The policy has also inspired leaders of local communities to help achieve goals and reduce environmental impact.

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The carbon tax was designed to mitigate the country’s large pollution production and to create an alternative option to raising income taxes.

2008 - 2012

Ireland has seen a 15% decrease in greenhouse gas emissions since the implementation (Rosenthal, 2012).

Raised around €1 billion ($1.3 billion American dollars) (Rosenthal, 2012).

In 2006, Ireland emitted around 11.54 metric tonnes of carbon per capita, while Canada emitted around 18.81 metrics tonnes per capita (The Guardian, 2016).

Many citizens disliked the idea of additional tax. However, these individuals did not deny the benefits of carbon tax, creating more jobs and has encouraging a greener and more sustainable lifestyle.

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"We have 86 per cent of Canadians now living in provinces that have put

a price on carbon." -Justin Trudeau 2015

PLAN 103 (Winter 2016)

Instructor: Dr. Markus Moos

School of Planning

University of Waterloo

Kamal Chaouni-Benabdallah

Kaushika Vinotheeswaran

Fanqin (Deedee) Zeng

Sophie Lin

D E F I N I T I O N

TAXING CARBON

Carbon tax is a government-regulated finance mechanism that is designed to reduce carbon emissions by taxing the consumption of fossil fuels, thus incentivizing the use and production of cleaner energy.

THE CASE FOR a sustainable ONTARIO

I S I T P O S S I B L E ?The Constitution Act of 1967

In Section 92 (4a) of the Constitution Act of 1967, the document allows provincial legislature to raise money in relation to non-renewable resources through any form of pricing, such as taxes.

Studies

If implemented using the same revenue-neutral policy used by British Columbia, chances for success in Ontario are high.

Some Conservative Party members have to warmed up to the idea of pricing carbon. The reduction of emissions has greater economic gains than losses, especially when considering detrimental externalities such as pollution and environmental degradation.

Parliament

Prime Minister Justin Trudeau has discussed the topic of the carbon tax for Canada in hopes to reduce the country’s environmental impact.

Trudeau notes that the style of pricing should be left up to the province in order to cater to their specific needs.

In Ontario, a carbon tax is currently being implemented and is being supported by Conservative leader Patrick Brown in support of climate change initiatives.

C O N C L U S I O NIn the exploration of a carbon tax, the Ontario government should consider the potential benefits and drawbacks of various revenue collection and redistribution designs. This dimension can be the determining factor in the prolonged success or failure of carbon tax. A customized design can ensure that the tax is both well aligned with government policies and initiatives, as well as environmental, social, and economic objectives. Drawbacks associated with the economic dimension of carbon tax can be offset with carefully designed revenue management, like that of the revenue-neutral carbon tax in British Columbia. Although the implementation of a new tax is typically unpopular, a properly designed carbon tax can be used to decrease environmental impacts, maintain economic integrity, and ensure equity for all Ontarians.

F U R T H E R R E A D I N GBeaty, R., Lipsey, R., & Elgie, S. (2014). The Shoking truth about B.C.’s carbon tax: It works. The Globe and Mail. Retrieved from

http://www.theglobeandmail.com/opinion/the-insidious-truth-about-bcs-carbon-tax-it-works/article19512237/

Rosen, L. (2015). Even Among Business Conservatives the Case for a Carbon Tax is Accepted. Cesran International. Retrieved from http://cesran.org/4382.html

Rosenthal, E. (2012). Carbon Taxes Make Ireland Even Greener. The New York Times. Retrieved from http://www.nytimes.com/2012/12/28/science/earth/in-ireland-carbon-taxes-pay-off.html?_r=0

The Guardian. (2016). Carbon emissions per person, by country. DataBlog. Retrieved from http://www.theguardian.com/environment/datablog/2009/sep/02/carbon-emissions-per-person-capita

D E F I N I T I O N

TAXING CARBONTAXING CARBONTHE CASE FOR ONTARIO

Carbon tax is a government-regulated finance mechanism that is designed to reduce greenhouse gas (GHG) emissions

by taxing the use of fossil fuels such as coal, natural gas, and oil on the basis of their carbon content (Al-Abdullah, 1999). It is an effective tool to lower GHG emissions, as

it incentivizes the use of cleaner, more energy efficient fuels, and the use of carbon-neutral alternatives for energy production (Al-Abdullah, 1999).

The Constitution Act of 1967S. 91(3): the Parliament of Canada has control over “The raising of money by any Mode or System of Taxation.”

S. 92(2): the province may enforce “Direct Taxation within the Province in order to the raising of a Revenue for Provincial purposes.”

S. 92(4a): “In each province, the legislature may make laws in relation to the raising of money by any mode of system in respect of non-renewable natural resources and forestry resources in the province and the primary production therefrom.”

I S I T P O S S I B L E ?

B R I T I S H C O L U M B I A

C A S E I I

2008 - present

level of emissions reduced

revenue raised

As a Canadian province, B.C. is under the same constitution as Ontario. At the moment, B.C. is governed by the Liberal Party (cite)

public opinion

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P R O S

C O N S

C O N C L U S I O N