From the Frontier Centre for Public Policy

By Lee Harding

Lee Harding exposes the truth behind Canada’s sky-high carbon tax—one that’s hurting our oil industry and driving businesses away. With foreign oil paying next to nothing, Harding argues this policy is putting Canada at a major economic disadvantage. It’s time to rethink this costly approach.

Our sky-high carbon tax places Canadian businesses at a huge disadvantage and is pushing investment overseas

No carbon tax will ever satisfy global-warming advocates, but by most measures, Canada’s carbon tax is already too high.

This unfortunate reality was brought to light by Resource Works, a B.C.-based non-profit research and advocacy organization. In March, one of their papers outlined the disproportionate and damaging effects of Canada’s carbon taxes.

The study found that the average carbon tax among the top 20 oil-exporting nations, excluding Canada, was $0.70 per tonne of carbon emissions in fiscal 2023. With Canada included, that average jumps to $6.77 per tonne.

At least Canada demands the same standards for foreign producers as it does for domestic ones, right? Wrong.

Most of Canada’s oil imports come from the U.S., Saudi Arabia, and Nigeria, none of which impose a carbon tax. Only 2.8 per cent of Canada’s oil imports come from the modestly carbon-taxing countries of the U.K. and Colombia.

Canada’s federal consumer carbon tax was $80 per tonne, set to reach $170 by 2030, until Prime Minister Mark Carney reduced it to zero on March 14. However, parallel carbon taxes on industry remain in place and continue to rise.

Resource Works estimates Canada’s effective carbon tax at $58.94 per tonne for fiscal 2023, while foreign oil entering Canada had an effective tax of just $0.30 per tonne.

“This results in a 196-fold disparity, effectively functioning as a domestic tariff against Canadian oil production,” the research memo notes. Forget Donald Trump—Ottawa undermines our country more effectively than anyone else.

Canada is responsible for 1.5 per cent of global CO2 emissions, but the study estimates that Canada paid one-third of all carbon taxes in 2023. Mexico, with nearly the same emissions, paid just $3 billion in carbon taxes for 2023-24, far less than Canada’s $44 billion.

Resource Works also calculated that Canada alone raised the global per-tonne carbon tax average from $1.63 to $2.44. To be Canadian is to be heavily taxed.

Historically, the Canadian dollar and oil and gas investment in Canada tracked the global price of oil, but not anymore. A disconnect began in 2016 when the Trudeau government cancelled the Northern Gateway pipeline and banned tanker traffic on B.C.’s north coast.

The carbon tax was introduced in 2019 at $15 per tonne, a rate that increased annually until this year. The study argues this “economic burden,” not shared by the rest of the world, has placed Canada at “a competitive disadvantage by accelerating capital flight and reinforcing economic headwinds.”

This “erosion of energy-sector investment” has broader economic consequences, including trade balance pressures and increased exchange rate volatility.

According to NASA, Canadian forest fires released 640 million metric tonnes of carbon in 2023, four times the amount from fossil fuel emissions. We should focus on fighting fires, not penalizing our fossil fuel industry.

Carney praised Canada’s carbon tax approach in his 2021 book Value(s), raising questions about how long his reprieve will last. He has suggested raising carbon taxes on industry, which would worsen Canada’s competitive disadvantage.

In contrast, Conservative leader Pierre Poilievre argued that extracting and exporting Canadian oil and gas could displace higher-carbon-emitting energy sources elsewhere, helping to reduce global emissions.

This approach makes more sense than imposing disproportionately high tax burdens on Canadians. Taxes won’t save the world.

Lee Harding is a research fellow for the Frontier Centre for Public Policy.

From the Frontier Centre for Public Policy

By Lt. Gen. (Ret.) Michel Maisonneuve

Canada’s military is broken, and unless Ottawa backs its spending with real reform, we’re just playing politics with national security

Prime Minister Mark Carney’s surprise pledge to meet NATO’s defence spending target is long overdue, but without real reform, leadership and a shift away from bureaucracy and social experimentation, it risks falling short of what the moment demands.

Canada committed in 2014 to spend two per cent of its gross national product on defence—a NATO target meant to ensure collective security and more equitable burden-sharing. We never made it past 1.37 per cent, drawing criticism from allies and, in my view, breaching our obligation. Now, the prime minister says we’ll hit the target by the end of fiscal year 2025-26. That’s welcome news, but it comes with serious challenges.

Reaching the two per cent was always possible. It just required political courage. The announced $9 billion in new defence spending shows intent, and Carney’s remarks about protecting Canadians are encouraging. But the reality is our military readiness is at a breaking point. With global instability rising—including conflicts in Ukraine and the Middle East—Canada’s ability to defend its territory or contribute meaningfully to NATO is under scrutiny. Less than half of our army vehicles, ships and aircraft are currently operational.

I’m told the Treasury Board has already approved the new funds, making this more than just political spin. Much of the money appears to be going where it’s most needed: personnel. Pay and benefit increases for serving members should help with retention, and bonuses for re-enlistment are reportedly being considered. Recruiting and civilian staffing will also get a boost, though I question adding more to an already bloated public service. Reserves and cadet programs weren’t mentioned but they also need attention.

Equipment upgrades are just as urgent. A new procurement agency is planned, overseen by a secretary of state—hopefully with members in uniform involved. In the meantime, accelerating existing projects is a good way to ensure the money flows quickly. Restocking ammunition is a priority. Buying Canadian and diversifying suppliers makes sense. The Business Council of Canada has signalled its support for a national defence industrial strategy. That’s encouraging, but none of it will matter without follow-through.

Infrastructure is also in dire shape. Bases, housing, training facilities and armouries are in disrepair. Rebuilding these will not only help operations but also improve recruitment and retention. So will improved training, including more sea days, flying hours and field operations.

All of this looks promising on paper, but if the Department of National Defence can’t spend funds effectively, it won’t matter. Around $1 billion a year typically lapses due to missing project staff and excessive bureaucracy. As one colleague warned, “implementation [of the program] … must occur as a whole-of-government activity, with trust-based partnerships across industry and academe, or else it will fail.”

The defence budget also remains discretionary. Unlike health transfers or old age security, which are legally entrenched, defence funding can be cut at will. That creates instability for military suppliers and risks turning long-term procurement into a political football. The new funds must be protected from short-term fiscal pressure and partisan meddling.

One more concern: culture. If Canada is serious about rebuilding its military, we must move past performative diversity policies and return to a warrior ethos. That means recruiting the best men and women based on merit, instilling discipline and honour, and giving them the tools to fight and, if necessary, make the ultimate sacrifice. The military must reflect Canadian values, but it is not a place for social experimentation or reduced standards.

Finally, the announcement came without a federal budget or fiscal roadmap. Canada’s deficits continue to grow. Taxpayers deserve transparency. What trade-offs will be required to fund this? If this plan is just a last-minute attempt to appease U.S. President Donald Trump ahead of the G7 or our NATO allies at next month’s summit, it won’t stand the test of time.

Canada has the resources, talent and standing to be a serious middle power. But only action—not announcements—will prove whether we truly intend to be one.

The NATO summit is over, and Canada was barely at the table. With global threats rising, Lt. Gen. (Ret.) Michel Maisonneuve joins David Leis to ask: How do we rebuild our national defence—and why does it matter to every Canadian? Because this isn’t just about security. It’s about our economy, our identity, and whether Canada remains sovereign—or becomes the 51st state.

Michel Maisonneuve is a retired lieutenant-general who served 45 years in uniform. He is a senior fellow at the Frontier Centre for Public Policy and author of In Defence of Canada: Reflections of a Patriot (2024).