Ontario premier defends carbon tax recession claims in wake of criticism

Premier Doug Ford doubled down Tuesday on his warning that a federal carbon tax will trigger a recession, lashing out at economists who said his claim was baseless.

His defence via social media came after he faced criticism from experts and the federal government for saying a carbon price will be an “economic disaster.”

Doug Ford is defending one of his most controversial policies, arguing that a carbon tax would trigger a recession in Ontario. Photo by Bruce Reeve via Flickr Commons.
Doug Ford is defending one of his most controversial policies, arguing that a carbon tax would trigger a recession in Ontario. Photo by Bruce Reeve via Flickr Commons.

“The threat of a carbon tax recession is real,” Ford wrote on Twitter. “The cost of goods that are made, farmed + transported in Ontario will go up with a carbon tax. The price will be paid by Ontarians.”

Ford’s initial comments, made during a speech at the Economic Club of Canada on Monday, led many experts to say there is no credible analysis to back up his claims. A number of studies suggest the carbon price will have a small impact on the national economy but will not cause a fiscal slowdown.

The premier, however, stood his ground.

“It’s hard to believe economists with theories that making everything more expensive is a good idea,” Ford tweeted Tuesday.

Ford has been a vocal critic of carbon pricing since he entered provincial politics last year. His Progressive Conservative government scrapped Ontario’s cap-and-trade system after it was elected, calling it a “cash grab” that didn’t help the environment, and has since launched a legal challenge of Ottawa’s carbon pricing plan.

The federal carbon tax, which goes into effect April 1, will impact Ontario, Saskatchewan, Manitoba, and New Brunswick, which have not adopted their own carbon pricing plans.

In defending Ford’s comments in various media reports, the premier’s staff cited a report from the Conference Board of Canada which said the carbon tax will shrink Canada’s $2.1 trillion gross domestic product economy by $3 billion.

Robyn Gibbard, one of the study’s authors, challenged the premier’s staff’s assertions in an online post.

“At no point in our research paper do we say that the carbon tax could cause a recession,” he said. “We specifically describe the overall economic impact as ‘small.”’

The federal government has also disagreed with Ford’s claim, saying its plan will cut emissions and grow the economy.

University of British Columbia economics professor Kevin Milligan said the Ford government need only look west to see a carbon pricing system that has not adversely effected the economy.

“BC has had a carbon price for 10 years and we are leading the country in growth,” he said. “It doesn’t mean the carbon price is causing the growth but what it does mean is we can definitely rule out the case that a carbon price causes a recession.”

Ford said Monday that Ontario does not need a carbon tax to help it reach its emission targets, pointing to his government’s new climate change plan introduced late last year.

Under its plan, Ontario will use taxpayer dollars to spur private investment in clean technologies and create performance standards for large emitters. The province will spend $400 million over four years on a fund called the Ontario Carbon Trust, which aims to entice companies to invest in initiatives that reduce greenhouse gas emissions.

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1 Comment
  1. Harald says

    Using BC as an example of where a carbon tax “hasn’t caused problems” is in itself, dumb. Yes, BC has done well over the last decade, but that’s due to positioning of BC on the Pacific coast, and the entry point for anything coming in from, or going out to, Asia. Ontario/Quebec are stuck with the St. Lawrence, and the Great Lakes. That means they’re stuck with the US as their primary trading partner…and with the new NAFTA, odds are, the combination is going to hurt central Canada badly.

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