GOLDSTEIN: Liberals’ $200B climate plan needs a forensic audit

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Now that the leading contenders in the Liberal leadership race – Mark Carney and Chrystia Freeland – have promised, vaguely, to cancel Prime Minister Justin Trudeau’s carbon tax, what do they plan to do about the $200-billion-plus, taxpayer-funded sinkhole the Liberals have created since 2015, ostensibly to fight climate change?

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What it really needs is a forensic audit, which we’re never going to get if the Liberals win this year’s election.

For now, Trudeau’s carbon tax – aka the consumer fuel charge, which increases the cost of gasoline, natural gas and 20 other forms of fossil fuel energy to consumers – will increase April 1 by 18.75% to $95 per tonne of industrial greenhouse gas emissions, up from $80 per tonne.

That will hike the cost of gasoline by 20.91 cents per litre, and the cost of natural gas used for home heating by 18.11 cents per cubic meter, since the carbon tax was instituted in 2019.

But it’s just one of 149 government programs meant to address climate change, even as the Trudeau government remains far behind its targets of reducing emissions by at least 40% compared to 2005 levels by 2030, and to net zero by 2050.

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As of 2022, the latest government data available, emissions were down just 7.1% since 2005.

To hit the 2030 target, the government will have to reduce current emissions by 251 million tonnes annually, the equivalent of shutting down emissions from Canada’s entire oil and gas sector (216.7 tonnes annually), causing a recession and still falling short.

Trudeau has justified his national carbon tax because, he said, the alternatives – government subsidies and regulations – were far more expensive, but the reality is he imposed all three.

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For all the controversy about Trudeau’s consumer fuel charge, it was always a bit player in the Liberals’ climate plan, responsible for eliminating so few emissions that the government didn’t keep track of them – although the Canadian Climate Institute estimated it could be as little as 8%, with a maximum of 14%, of the 2030 target.

The largest contributor – a cap-and-trade carbon pricing system for large emitters paid for by Canadians in the form of higher consumer prices instead of higher taxes – is in theory responsible for cutting 20% to 48% of emissions in relation to the 2030 target.

Other Trudeau government programs meant to reduce emissions, many involving multi-billion-dollar budgets, are scattered across numerous federal departments and agencies making them hard to track.

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An investigation by auditor general Karen Hogan of the now-disbanded, $1-billion Sustainable Development Technology Fund, aka “the green slush fund,” suggests some may be rife with fraud.

Others, according to federal environment commissioner Jerry DeMarco, lack transparency, may be overestimating and/or double-counting emission cuts, as well as basing calculations on outdated computer modelling.

One of the biggest programs on which federal and provincial governments are relying to reduce emissions involves massive taxpayer-funded subsidies to 13 major auto sector projects to build electric vehicles and establish a domestic supply chain for manufacturing EV batteries in Canada.

Parliamentary budget officer Yves Giroux has estimated the total cost of these subsidies paid by federal and provincial taxpayers up to April 2024 at $52.5 billion – $31.4 billion, or 60%, paid by federal taxpayers and $21.1 billion, or 40%, paid by provincial taxpayers.

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The PBO said the $52.5 billion public subsidy for operating and capital costs is $6.3 billion, or 14%, higher than the announced investments of $46.1 billion the auto sector is contributing to the projects in capital expenses.

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In 2023, Freeland said the Trudeau government would not have invested as heavily in clean energy subsidies were it not for the passage of former U.S. president Joe Biden’s bizarrely-named Inflation Reduction Act, which included massive subsidies to the private sector for clean technology.

Freeland told CTV’s Power Play at the time: “I don’t think we would have done as much, had the IRA not been introduced,” which she called a “game changer” because the U.S had “put a ton of money on the table, and it was really important for us, having been ahead in this race, not to fall behind.”

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The problem now is that the new “game changer,” U.S. President Donald Trump, has issued an executive order to end all U.S. government subsidies, programs and policies that encourage EV sales through “ill-conceived, government-imposed market distortions.”

That throws the value of the $52.5 billion federal and provincial taxpayers are paying propping up Canada’s fledging EV sector into doubt because it’s so integrated with the U.S. market, especially if Trump imposes tariffs on the Canadian auto sector on April 2, which would throw the North American auto market into chaos.

lgoldstein@postmedia.com

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