Carbon taxes should give pause for workers
In many aspects of life, the phrase “the straw that broke the camel’s back” rings true. Eventually, something has to give.
When employers keep layering excessive demands on their employees, some workers will eventually throw up their hands and quit. Similarly, when consumers decide to make a large purchase like a home or car, and a salesperson keeps layering on additional fees, some buyers will eventually walk away.
The same is true for businesses when it comes to government policies. If governments continuously pile on expensive charges and regulations, some businesses will close up shop and find a place to locate without all the headaches and costs or, decide to pursue activities aside from running a business.
With that in mind, SecondStreet.org decided to look into whether or not new carbon taxes are the proverbial straw that is breaking the backs of businesses. The evidence we found suggests carbon taxes will indeed cause back problems.
Peter Gossmann, vice-president of the Coalition of Concerned Manufacturers and Businesses of Canada, told us: “In our coalition we have about 220 businesses that, as a result of pressures like the carbon tax, are seriously looking at expanding in the U.S. I would say of our 220 members, about a third are seriously considering it and 10% are actually doing it and we are one of those.”
Peter described to us how the new tax, and other government policy changes (e.g. rising electricity costs due to government policies) affect workers.
“The more burden there is on their employer obviously the less they can put out for bonuses, for wage increases. It just puts a downward pressure on an employee’s ability to move forward. That’s probably the best case scenario. The worst case is that they lose their employment all together because businesses simply can’t afford that extra push on their costs from carbon tax.”
A 2019 survey of Canadian Federation of Independent Business members affected by the new federal carbon tax indicated that 68% are opposed. Somewhat ironically, a slightly higher percentage indicated the new tax makes it harder for them to spend money on new technology and other initiatives to become more environmentally-friendly.
We hired Nanos Research to do some polling for us on this issue. We asked Canadians if they thought carbon taxes would make our country’s business climate more competitive, less competitive or have no impact?
Twice as many (39%) said the tax would make Canada less competitive versus those who said more competitive (18%). Further, 58% of Canadians indicated that they believed carbon taxes would make it at least a little harder for businesses to employ workers or hire new ones. Conversely, only 34% believed there would be no impact.
While many Canadians have concerns about the current carbon tax, what’s interesting is that two federal government reports have indicated the new federal carbon tax will need to rise by five times the current rate to meet emission targets.
If China, the United States and other countries – which make up the bulk of the world’s emissions – don’t curtail their emissions, it seems all Canada will have done is broken some backs without any environmental gain.
Colin Craig is the President of SecondStreet.org, a new Canadian think tank.
This column was published in Sun newspapers on July 21, 2019