It is not quite the trial of the century, but the live video feed from Ontario’s Court of Appealhearing this weekon the constitutionality of Ottawa’s carbon tax does have its little moments of drama. At one point Tuesday, after Sharlene Telles-Langdon, on behalf of the Attorney General of Canada, had launched into her case against Ontario’s attempt to have the carbon tax declared unconstitutional, Justice James C. MacPherson leaned in with a pointed question.
Ontario’s carbon emissions are down 22 per cent without a carbon tax, said MacPherson — presumably citing data provided by Ontario during its presentation on Monday. “Why don’t you just leave them alone?” Ontario, he added, “has had a great result.”
Interesting and pertinent question: if Ontario is already cutting carbon emissions without a carbon tax, it seems redundant to impose a constitutionally iffy tax to do something the province is already doing on its own. The question also seemed to momentarily fluster Telles-Langdon, who then began rifling through pages of her briefing book in search of the big alarmist arguments Ottawa is advancing to support the imposition of a national carbon tax on all Canadians.
Once she got back on track, Telles-Langdon proceeded to summarize Ottawa’s standard claims about the need for urgent action to curb greenhouse gas emissions and how Canada, without a carbon tax, was failing to meet its international targets. Ottawa’s case is filled with political diversions. Global climate change is happening now, the science is “well established,” extreme weather is increasing along with risks to human health, Lyme disease, melting permafrost, and so on and so on. The factum also throws in the irrelevant anddiscredited insurance industry claimthat carbon-induced extreme weather is “now costing up to $1.2-billion a year.”
Canada needs to cut 200 megatonnes from its carbon emissions, said Telles-Langdon, and without a carbon tax it seems unlikely to exceed a reduction of 50 megatonnes. Provincial action is not enough to solve this national and international economic, environmental and political problem. It’s time to invoke the peace, order and good government clause of the constitution and impose a carbon tax.
With a carbon tax, said Telles-Langdon, Ottawa is introducing a “price signal” that will prompt Canadians to reduce their consumption of carbon-based fossil fuels.
How deep into climate science and the international global warming political swamp is Ontario’s court of appeal going to descend? Are the five justices expected to reach conclusions on the merits of climate change science, the validity of scaremongering geopolitical activists at the United Nations, and the soundness of the economics of price-signalling taxes?
Is the court expected to make a decision on the basis of — or somehow in agreement with — an intervention from, say, the David Suzuki Foundation that claims “Canada and the world are engaged in an existential struggle against climate change.” A carbon tax, said the Suzuki Foundation, is “urgently necessary to address a national emergency.”
None of these claims, from Ottawa and others, should sway the court. Nor should the justices fall for the economic arguments that a carbon tax is a superior form of government intervention — if intervention is necessary — on account of its alleged foundation in a market economy.
Canada’s Ecofiscal “Commission” filed a 115-page intervention arguing that a carbon tax is a “market-based instrument” that is less costly and far superior to any other policy models. As is now routine, the Ecofiscal Commission claimed the B.C. carbon tax has been a success because it reduced carbon emissions in the province — a claim that isdubious at best.
By filing its intervention, the ecofiscalists are essentially asking the court to approve and adopt its theories as justification for approval of a federal carbon tax. Since the court has heard little evidence to the contrary regarding economic critiques of carbon taxes, the court has no reason to accept the ecofiscal evidence that carbon taxes are just another form of efficient market pricing.
A carbon tax is not a market-based price. It’s a state-imposed fixed price that has no connection with supply and demand, except to the extent that its proponents aim to reduce demand for carbon.
What the court should know, but will not hear, is that a carbon price turns the role of prices upside down. In a market economy, prices contain thousands of pieces of information about a product: the unmeasurable individual wants of millions of people, the costs of hundreds of inputs, the supply and demand circumstances at a point in time, assessments of future conditions, the relationship of all the prices for similar and competing products. Price is part of a process, jam-packed with unmeasurable information.
In a market economy, prices are not a fixture in time that just needs to be tweaked to get a different, desired result. Taxes are not market prices.
Government price-fixing regimes such as carbon taxes throw all the real price information out, declare that it’s all wrong and claim we need a new price that will incorporate the information politicians think should be in the price or would be in the price if people only knew what we the politicians know.
Carbon pricing, in effect, tears down the market price and all the information it contains and imposes government-regulated pricing. That’s not a market system and the Appeal Court of Ontario should understand that fact — whatever it decides on the legal issues.