Is Wynne’s Carbon Tax the Precursor to an Economic Catastrophe?

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It all just seems like a fairy tale, doesn’t it?

The citizens of Ontario willingly give a small share of their incomes to the government. The government spends it to reduce the current levels of emissions. Ontario’s households and businesses flourish. And the world becomes a much better place to live. How good would that be?

Wynne’s policy on cap-and-trade seems too good to be true for one simple reason. It isn’t true. And this isn’t just us speaking. Even Ontario’s auditor general Bonnie Lysyk shares the view. According to some of the latest reports, the carbon tax scheme would have a huge cost for businesses and households. And the desired reduction in the level of emissions will be minimal, at best.

The Statistical Tale

The biggest impact of the cap-and-trade policy is, surprisingly, not positive. And it’s not even related to the environment. It’s a numbers game. The carbon tax would just push companies further to stop investing in Ontario and start investing elsewhere. And this isn’t just an empty claim. It’s backed by statistical evidence.

If the cap-and-trade continues to exist by the year 2020, businesses would take around $466 million worth of finances to places like California and Quebec. By 2030, that amount will have increased to a massive $2.2 billion. All the while, the impact on the emissions would be, you guessed it, negligible.

Lack Of Transparency

There are bigger problems for the cap-and-trade policy than that. The first problem is about the projected cost of the project. Even the government figures differed on what the cost would be. But let’s just assume that it is around $8 billion. Out of that, only one billion will go to previously approved projects. We just don’t know where the rest will go.    

Overall, there’s a horrible lack of transparency surrounding it all. Wynne’s government hasn’t been exactly clear about the costs of the program and where the revenue will go. Under these circumstances, the only rational conclusion can be that the project is heading towards a massive disaster.