Business
Carney says as PM he would replace the Carbon Tax with something ‘more effective’

From the Canadian Taxpayers Federation
Carney stumbles out the gate on carbon taxes
Prime minister hopeful Mark Carney is supposed to be the economic messiah sent to save the Liberals from the depths of polling purgatory.
But right out the gate, Carney showed he doesn’t have an answer to the most important question:
Will he keep the carbon tax?
Carney should have seen that question coming. His campaign leaked to the media that he would scrap the carbon tax. But when reporters asked him that question at his campaign kickoff in Edmonton, he went wonky and wobbly.
It should have been a yes or no answer. Instead, Carney served up an unappetizing word salad.
“If you are going to take out the carbon tax, we should replace it with something that is at least, if not more, effective,” Carney said. “Perception may be that it takes out more than the rebate provides, but reality is different, and Canadians will miss that money.”
Carney’s stance on the carbon tax is clear as mud and it’s bad for two key reasons.
First: he’d replace the carbon tax with something more “effective.”
The carbon tax has been very effective at sucking a lot of money out of the wallets of Canadians. And the carbon tax has been ineffective at hitting the government’s own emissions targets.
The carbon tax is an expensive failure.
Second: Carney parrots the insulting Trudeau government narrative that the carbon tax is all a “perception” problem.
The message is Canadians are too stupid to appreciate the genius of the carbon tax, and if the government could change the perception of the masses, the carbon tax would be just fine.
Worse for Carney, his answer was an assault on his own brand.
Carney’s the guy who is supposed to have his homework done. Instead, he shrugged at the obvious question, saying he’d release a “comprehensive” plan later.
In other words: just trust him.
But here’s the thing: Carney should have had an answer yesterday and taxpayers have trust issues.
When the Liberals won the 2015 election, their platform was sparse on details about their future signature policy. The carbon tax was buried on page 39 of their platform as “a price on carbon.”
The Liberal government imposed a carbon tax in 2019 misleading Canadians, saying the tax would stop at 11 cents per litre of gasoline in 2022.
“The commitment was to go up to 2022,” then environment minister Catherine McKenna said, shortly before the 2019 federal election. “There was no intention to go up beyond that, there’s no secret agenda.”
After the election, the Trudeau government announced it would keep cranking up the carbon tax every year until it cost 37 cents per litre in 2030. Filling up a minivan at that rate would cost nearly $30 extra in just the carbon tax.
The current Liberal government still won’t rule out future carbon tax hikes.
The government also claims most families get more back in rebates than they pay in the carbon tax, despite the Parliamentary Budget Officer issuing three reports confirming the carbon tax costs Canadians.
The carbon tax will cost the average family up to $399 this year, even with the rebates factored in, according to the PBO.
Liberal leadership hopefuls who want to earn trust with taxpayers must push the Trudeau cabinet to scrap the carbon tax immediately.
The next Liberal leader faces a daunting timeline.
When Parliament comes back on March 24, there will be a throne speech, then likely a flurry of confidence motions. This could bring down the government and trigger an election.
On April 1, the government is set to hike the carbon tax.
Does Carney want to hike the carbon tax during the first week of his election campaign?
If Carney is as savvy as we’ve been told, then his answer should be a loud “no.”
To prove to Canadians he’s opposed to the carbon tax, Carney must call on the Trudeau cabinet to scrap it right now.
Business
Mark Carney’s carbon tax plan hurts farmers

From the Canadian Taxpayers Federation
Liberal leadership front-runner Mark Carney recently announced his carbon tax plan and here are some key points.
It’s expensive for Canadians.
It’s even more expensive for farmers.
Carney announced he would immediately remove the consumer carbon tax if he became prime minister.
That sounds like good news, but it’s important to read the fine print.
Carney went on and announced that he would be “integrating a new consumer carbon credit market into the industrial pricing system.” Carney also said he would “improve and tighten” the industrial carbon tax and impose carbon tax tariffs on imports into Canada.
If that sounds like Carney isn’t getting rid of the carbon tax, that’s because he isn’t. He’s trying to hide the costs from Canadians by imposing higher carbon taxes on businesses.
What that means is that Carney’s plan would tax businesses and then businesses will pass those costs onto consumers.
That also means farmers.
Under the current carbon tax, farmers have an exemption from the carbon tax on the gas and diesel they use on their farm. The hidden industrial carbon tax is applied directly to industry. Businesses are forced to pay the carbon tax if they emit above the government’s prescribed limit.
But businesses don’t just swallow those costs. They pass them on. The trucking industry is a great example.
“Due to razor thin margins in the trucking industry, these added costs cannot be absorbed and must be passed on to customers,” said the Canadian Trucking Alliance when analyzing the current Trudeau carbon tax.
The same concept applies to the Carney scheme.
If Carney removes the consumer carbon tax and replaces it with a higher tax on businesses under the hidden industrial carbon tax, that means more costs for farmers.
There isn’t any exemption for farmers under the industrial carbon tax. Oil and gas refineries will be paying a higher carbon tax and they will be forced to pass that cost onto their consumers. Farmers use a lot of fuel.
The pain doesn’t stop there. Farmers also use a lot of fertilizer and Carney’s carbon tax means higher costs for fertilizer plants. Then farmers will be stuck paying more for fertilizer.
Some businesses, like those fertilizer plants, could pack up and move production south. But farmers are still going to need fertilizer. Carney’s plan compounds the pain with carbon tax tariffs.
Fertilizer is only one example. If Canadian farmers need to buy a part to fix equipment that can only come from the U.S., it could be more expensive because of Carney’s carbon tax tariffs.
This will hurt Canadian farmers when they’re buying supplies. But it’ll also hurt when farmers when they go to market. Canadian farmers compete with farmers around the world and majority of them aren’t paying carbon taxes.
Farmers wouldn’t be at a disadvantage because American farmers are smarter or farm better, but because, under Carney’s carbon tax, they would be stuck paying costs competitors don’t have to pay. And farmers know this all too well.
“My competitors to the south of me in the United States do not pay that [carbon] tax, so now my cost goes up and I have no alternative,” said Jeff Barlow, a corn, wheat and soybean farmer in Ontario. “By penalizing me there’s nothing else that I can do but just be penalized.”
And if farmers won’t be the only ones hurt.
Families across Canada are struggling with grocery prices and increasing the cost of production for farmers certainly won’t lower those prices.
Carney says that he wants to cancel the consumer tax because it’s too “divisive.” That statement misses the nail completely and hammers the thumb. Canadians don’t want to get rid of the carbon tax because of perception, they want to get rid of it because it makes life more expensive.
Carney needs to commit to getting rid of carbon taxes, not rebranding the failed policy into something that could end up costing Canadians and farmers even more.
Business
Do Minimum Wage Laws Accomplish Anything?

David Clinton
All the smart people tell us that, one way or another, increasing the minimum wage will change society. Proponents claim raising pay at the low end of the economy will help low-income working families survive in hyper-expensive communities. Opponents claim that artificially increasing employment costs will either drive employers towards adopting innovative automation integrations or to shut down their businesses altogether. Either way, goes the anti-intervention narrative, there will be fewer jobs available.
Well, what’ll it be? Canadian provinces have been experimenting with minimum wage laws for many years. And since 2021, the federal government has imposed its own rate for employees of all federally regulated industries. There should be plenty of good data out there by now indicating who was right.
The Audit is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
Historical records on provincial rates going back decades is available from Statistics Canada. For this research, I used data starting in 2011. Since new rates often come into effect mid-year, I only applied a year’s latest rate to the start of the following year. 2022 itself, for simplicity, was measured by the new federal rate, with the exception of British Columbia who’s rate was $0.10 higher than the federal rate.
My goal was to look for evidence that increasing statutory wage rates impacted these areas:
- Earnings among workers in full-service restaurants
- Operating profit margins for full-service restaurants
- Total numbers of active businesses in the accommodation and food services industries
I chose to focus on the food service industry because it’s particularly dependent on low-wage workers and particularly sensitive to labour costs. Outcomes here should tell us a lot about the impact such government policies are having.
Restaurant worker income is reported as total numbers. In other words, we can see how much all of, say, Manitoba’s workers combined took home in a given year. For those numbers to make sense, I adjusted them using overall provincial populations.
Income in British Columbia and PEI showed a strong correlation to increasing minimum wages. Interestingly, BC has consistently had the highest of all provinces’ minimum wage while PEI’s has mostly hung around the middle of the pack. Besides a weak negative correlation in Saskatchewan, there was no indication that income in other provinces either dropped or grew in sync with increases to the minimum wage.
Nation-wide, by weighting results by population numbers, we got a Pearson coefficient 0.30. That means it’s unlikely that wage rate changes had any impact on take-home income.
Did increases harm restaurants? It doesn’t look like it. I used data measuring active employer businesses in the accommodation and food services industries. No provinces showed any impact on business startups and exits that could be connected to minimum wage laws. Overall, Canada’s coefficient value was 0.29 – again a very weak positive relationship.
So restaurants haven’t been collapsing at epic, extinction-level rates. But do government minimums cause a reduction in their operating profit margins? Apparently not. If anything, they’ve become more profitable!
The nation-wide coefficient between minimum wages and restaurant profitability was 0.88 – suggesting a strong correlation. But how could that be happening? Don’t labour costs make up a major chunk of food service operating expenses? Here are a few possible explanations:
- Perhaps many restaurants respond to rising costs by increasing their menu prices. This can work out well if market demand turns out to be relatively inelastic and people continue eating out despite higher prices.
- Higher wages might lead to lower employee turnover, reducing hiring and training costs.
- A higher minimum wage boosts worker incomes, leading to more disposable income in the economy. Although the flip-side is that we can’t see strong evidence of higher worker income.
- Higher wages can force unprofitable, inefficient restaurants to close, leaving stronger businesses with higher market share.
In any case, my big-picture verdict on government intervention into private sector wage rates is: thanks but don’t bother. All that effort doesn’t seem to have improved actual incomes on a population scale. At the same time, it also hasn’t driven industries with workers at the low-end of the pay scale to devastating collapse.
But I’m sure it has taken up enormous amounts of public service time and resources that could undoubtedly have been more gainfully spent elsewhere. More important, as the economist Alex Tabarrok recently pointed out, minimum wage laws have been shown to reduce employment for the disabled and measurably increase both consumer prices and workplace injuries.
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