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Member of Parliament

Nathaniel Erskine-Smith

  • Member of Parliament
  • Member of Parliament
  • Liberal
  • Beaches—East York
  • Ontario
  • Voting Attendance: 63%
  • Expenses Last Quarter: $123,505.63

  • Government Page
Context: House Hansard - 291 - Mar/19/24
Mr. Nathaniel Erskine-Smith (Beaches—East York, Lib.)
  • Mar/19/24 4:36:32 p.m.
  • Watch
Mr. Speaker, I will get to the conversation around pricing pollution, but I want to start with a threshold question that we all have to answer: Do members care to take action to save our planet? Do they care to reduce emissions for our kids? Do they care? If the answer is yes, then we get to a different question, which is how we are going to reduce emissions in the most efficient way. If we want to respect taxpayer dollars, then we reduce emissions in the most efficient way. We hear a lot about common sense from across the aisle. Common sense presumably should be that polluters pay, and pollution, members should know, is a classic market failure. I have heard some people bandying about different economic opinions on what a market failure is. In this case, the cost of polluting is costless to the polluter and is borne collectively by all of us. What is the answer to that? The answer is a price signal. The common-sense answer, very simply, is to make polluters pay. That is what this price on pollution does. We do not want to penalize people or make them worse off. We just want to change the behaviour, so matched with that price, internalizing that negative externality, we make sure there is a rebate and recycle the revenue. I have heard people go back and forth on this. The fact is that, of the 100% of the revenue that goes back to the provinces of origin, 90% goes back to households directly. If there were a motion today that said that 100% should go back to households, I would vote for it for sure. We could improve it, but the fact is that 90% goes back. It is largely revenue-neutral. I heard a question asking if it works. Of course it works. This is not me saying this. If we look at the emissions progress report for 2030, we see more than a steady decline. We see a decline from business as usual. If we had taken no action from 2015 on, or the kind of action we saw under the Harper government, we would have seen emissions rise to 815 megatonnes by 2030. If we look at that progress report, does anyone in the House know what it stands to be with all of the action we have put into place? It stands to be 467 megatonnes, which is not nearly enough and not where we need it to be, but that is a 43% reduction from business as usual and 36% toward our 40% target. We are very close to being where we say we want to be. By the way, a good amount of that is because of the price on pollution. The progress report says that 30% of that reduction in emissions comes from the price on pollution. When we look at that delta of 815 megatonnes down to 467 megatonnes, 23% of that total reduction from business as usual comes from the price on pollution, so, yes, it works as part of a very serious overall comprehensive climate plan. It is easy to care about climate change when we are well fed. I have heard a lot of talk in the House that the price on pollution is making people poorer, the worst among us, and it is hurting those who are already hurting. It is deeply cynical to trade on a real affordability crisis, to trade on the real stress and real struggles of so many people in need, to undermine an effective and efficient climate action that makes most households whole. It does not increase the cost of everything to send people to food banks. I said this when asking a question of a colleague and did not receive a good answer. We have seen 20% food inflation these last two years, and the price on pollution, economists tell us, accounts for under 1% of any inflationary impact. That is not the cause of the affordability crisis. We could have a very interesting debate about interest rates. Maybe the member for Carleton would tell us that he wants to fire the Governor of the Bank of Canada. We have had very interesting debates about interest rates and what is truly driving the cost of living crisis. It is absolutely not, economists will tell us, the price on pollution. We could also have an interesting debate about social welfare in this country. We have increased the Canada child benefit significantly. We have brought hundreds of thousands of kids out of poverty. We have increased the Canada workers benefit. We have increased the GIC for seniors. Do members know what provincial governments have done, largely Conservative provincial governments? They have not increased welfare and disability supports in line with the rise in inflation. I am standing here in Ontario, and the member could tell me what the Ford government has done to make sure disability payments keep pace with the cost of inflation, but Conservatives have done next to nothing. Do we want to talk about the real cost of living crisis and what drives that cost of living crisis? We could talk about food inflation. We could talk about interest rates, and we could talk about the lack of provincial action in their areas of responsibility. What we should not talk about, if we care about facts in the House, is the price on pollution. Much has been made of the PBO report. I wonder sometimes, listening to the debate in the House, whether anyone has actually read this report, so let me quote from it. On a fiscal basis, “most households will see a net gain [versus] the...fuel charge...and related GST”. As well, “The fiscal-only impact...is broadly progressive.” Hang on. What is this about? The PBO says it is going to cost us more. I am going to be absolutely fair in this, and there is a real debate we should have because what the PBO actually says is that, on a fiscal basis, for the cash-in, cash-out money that households pay and get back, 80% of households are, in fact, better off. What the PBO goes on to say is that, when one takes into account GDP impacts from the price on pollution, we see modest GDP reductions, though they are significant on a household basis, so most households are worse off if one includes fiscal and economic factors. They do not say that about low-income households so, again, trading on food banks and offering no real suggestions for helping people out of poverty is completely incorrect, even in the PBO's analysis. Let us focus a little more on whether the PBO is right. Fiscal analysis is easy. It is money in and money out. On an economic basis, I would say they are wrong. It is not gospel. We have this from the American Economic Journal, for example, on the macro impact of carbon pricing: “We find no evidence for a negative impact on employment or GDP growth but rather find a zero to modest positive impact.” There is also this, from the IMF, from June: “Countries that do not recycle revenues experience a substantial economic downturn while countries that recycle revenues only display a muted impact on economic activity.” For those keeping track at home, Canada recycles revenues. Worse, and this is fatal, let me quote the PBO as well. I wonder how this is not part of the conversation: “The scope of the report is limited to estimating the distributional impact of the federal fuel charge and does not attempt to account for the economic and environmental costs of climate change.” Maybe Conservatives could explain to me why we would consider the negative economic impacts of one side of the ledger of the price on pollution, and the fiscal impacts are better for households, but we would not consider alternative scenarios. We hear about “technology, not taxes”, but that is going to cost households more. It is going to be paid for by taxes or, worse, if we do not take into account the real economic costs of unchecked climate change. Let us be absolutely clear. If one does not have a serious climate plan in this country, and the federal Conservatives are not interested in a serious climate plan, we are going to see unchecked climate change. Let us return to costs. We have Conservatives who have no plan. Since I have been in Parliament, they have had no plan, except for Erin O'Toole, who was promptly ousted. Why was he ousted? For having a plan, and “technology, not taxes” is not a plan. What does the price on pollution do? The price on pollution says to consumers that it will be more expensive to pollute. Consumers will seek out cleaner alternatives and businesses will respond by innovating to meet consumer demand. If one does not have that price, which is internalizing that negative externality, businesses are not going to innovate. We are not going to see serious climate action from the private sector. If one wants technology, not taxes, it is going to be left to government subsidies alone, and where do government subsidies come from, Conservative friends? They come from taxes. If one wants one's taxes to go up, then axe the tax.
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