Thomas Mulcair on cap-and-trade

As part of last week’s conversation with the NDP leader, I asked a few questions about cap-and-trade and putting a price on carbon.

Are you ready, are you prepared, to fully engage a debate on carbon pricing?

It has to be part of the equation. When I talk about including the price and polluter pay, that’s part of the equation, of course. And that’s a basic principle of sustainable development.

Do you worry at all that you’ve lost that debate already by the fact that they can throw the phrase “carbon tax” at you?

When you watch Jacques Gourde being replayed in English, because he did one of his stupid stunts in English, you realize that the average Canadian commentator just looking at this is saying, these guys have lost their marbles.

This is a serious subject. Global warming is not a joke. It’s not a theory. It’s not somebody’s idea. It’s measurable. The disappearance of the polar ice cap is not a fiction, it’s measurable. They don’t want to measure it anymore, but it’s actually happening. If we have the two degrees centigrade temperature increase that we’re fearing, then we will have an extraordinarily damaging effect on life on earth and ecosystems and their ability to adapt that rapidly to that type of change. There are climate change deniers, but the jury’s already rung in on that. We can have different solutions for how to deal with that, we can have different analyses of how we got there. But the basic fact of the matter is if we don’t reduce greenhouse gases, then we’re in trouble. The way that works, the way that I’ve seen this work, because I was a minister of the environment and I was able to work on these things … I remember there was a big debate in 2008. We, like the Conservatives, were saying cap-and-trade. There was a strong reason to say cap-and-trade. By the way, we got pushed back strongly by some environmental groups: why aren’t you backing the Green Shift? And my answer was always forthright and straight and strong. I said, look, when it wasn’t CO2, it was SO2, which combined with H2O was producing S2HO4, acid rain. It was raining sulphuric acid on our forests and on the American forests in the northeast. We got together with the Americans, and companies like Inco, that had steadfastly refused to put in the scrubbers in their stacks, when faced with a lowering ceiling and the obligation to trade within that closed market, the year that it finally became more expensive for them to purchase the credits than it would be to put in the scrubbers, they put the scrubbers in. They had refused to put in the scrubbers, they had threatened to shut down and this was in the face of a Conservative Bill Davis government in Ontario, they had been pig-headed about it. The landscape up there was so rough that that’s where the Apollo astronauts trained. Go back to Sudbury today, you see millions of trees have been planted, the place is coming back, they’ve done the responsible thing.

So a cap-and-trade system will lower your ceiling, force people to come up with choices, get creative. If you look at the three years I was a minister in Quebec, you’ll see drops in greenhouse gas production, we were applying a plan. The Liberals, on the other hand, signed Kyoto and I can give you three words that you can google “Eddie,” “Goldenberg” and “galvanize” … it says so much about who the Liberals are. He admitted that they signed Kyoto as a public relations exercise. With no plan to meet any of those goals. That’s why Canada went on to have one of the worst records in the world … The Liberals have a history of flashing left and turning right on this sort of stuff. We’re going to try something new that’s never been tried before in Canadian politics, we’re going to tell people what we’re going to do and then once we’re elected, we’re actually going to do it.

The one issue that has come up … even, I think, within the NDP, is this question of revenue and whether revenue from cap-and-trade should be used strictly for environmental purposes or whether it could go into general revenues.

I think that there has to be an equivalent amount that goes into environmental purposes. It has to be concentrated in those provinces, those areas where that money is being generated. One of the things that we can do is displace some of the coal that we’re burning and we should be heading for that. That’s why I was the only Quebec politician in the 2011 campaign to back loan guarantees for the Lower Churchill. We took a hit on it a couple weeks ago. The Bloc was out there lighting their hair on fire. The National Assembly had its umpteenth resolution against those loan guarantees. And I stood up four-square in favour of those loan guarantees because you can’t be in favour of green renewables and then be against them the minute somebody wants to build them in another province. So this is actually a part of the vision of sustainable development that we’re going to be putting forward, a grid, a system of green renewables across Canada to displace a lot of the heavy oil, the coal that we’re burning to create electricity.

I don’t want to split hairs too much, but would you rule out using cap-and-trade revenue for social programs?

Yes. Somebody will tell you that at some point there’s a vases communicants, but what I’m saying is that you would have to have an equivalent amount that would go to those environmental purposes.

The revenue question goes back to a point of debate raised by Brian Topp during the NDP leadership race. For the sake of comparison, the Liberal “Green Shift” would have seen new revenues from a carbon tax matched by cuts to personal income taxes, cuts to corporate taxes, deductions meant to assist northern and rural Canadians with energy costs and measures to assist those with low incomes. In that last way, it was not a straight tax swap, nor a shift that was pitched as strictly environmental: it was also meant to deal with poverty.

The NDP’s 2011 platform attempts to match cap-and-trade revenue with spending on “green initiatives” (though it shows a fairly large surplus in year four). What I should have also asked Mr. Mulcair about last week was whether revenue from cap-and-trade would be used in any way to reduce costs on consumers through tax cuts or breaks. The party’s 2011 platform includes measures to reduce home heating costs (removing the federal sales tax from home heating and an extension of the home energy retrofit program), but there is also money set aside for “Helping Canadians Adjust.” In the discussion about costs, and when comparing the Conservative and NDP approaches to carbon emissions, it is obviously necessary to know how any increases in costs for consumers will be handled.

It is also interesting to note Mr. Mulcair’s insistence that revenue from cap-and-trade “has to be concentrated in those provinces, those areas where that money is being generated.” The idea that cap-and-trade could result in money being transferred from one province to another is a concern that Saskatchewan Premier Brad Wall has raised.