OTTAWA – In a flashy campaign-style announcement, Conservative Leader Erin O’Toole released his long-awaited climate plan today, seeking to blunt Liberal attacks and shore up suburban votes – at the risk of alienating his base and key industrial sectors.
Entitled “Secure the Environment: The Conservative Plan to Combat Climate Change,” O’Toole fully commits a future Conservative government to meeting Canada’s Paris 2030 climate targets and a consumer carbon price – albeit at a lower price than the Liberal plan. This is new ground for the federal Conservative Party which until now had pledged to eliminate the consumer carbon price.
Consumer carbon price
The main political selling point of the plan is a “Personal Low Carbon Savings Account,” which would result in a lower consumer carbon price by 2030, maxing out at $50/tonne compared to the Liberal’s $170/tonne plan. Instead of quarterly cash rebates under the Liberal plan, Canadians would be able to spend their personal carbon price payments on low carbon purchases, like a transit pass, bicycle, energy efficient furnace or electric vehicle.
Under this model, high carbon users would get to keep all of their carbon payments – which has political appeal when you consider that Conservative voters tend to live in rural communities or the suburbs where home heating or gasoline bills are higher. The Liberal government’s approach, in comparison, redistributes carbon payments from high carbon users to low carbon users, relying on invisible market signals to influence lower carbon choices.
While consumer rebates will be appealing, whether the Conservatives can convince environmentally-oriented voters that a carbon price less than 30% of what the Liberals are proposing is meaningful remains to be seen.
Tough industrial climate measures
With a significantly lower consumer carbon price, O’Toole needs to compensate with tougher measures elsewhere in the economy. Accordingly, his plan maintains or exceeds the Liberal government’s approach in several key areas:
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- Introducing a zero emission vehicle (ZEV) mandate, requiring 30% of vehicles sold to be ZEVs by 2030. This is despite the fact that ZEV supply is currently constrained and it will take time to build domestic battery supply chains.
- Maintain the industrial Output-Based Pricing System at current levels rising to $170/tonne by 2030, if our trading partners in the US and EU follow suit.
- Introduce a Renewable Natural Gas Mandate, requiring 15% of downstream natural gas consumption be renewable (e.g. captured from landfills or wastewater treatment or generated from biomass). This includes gas used in power plants and home heating. It is unclear if industrial processes would be covered, akin to the proposed gaseous clean fuel standard that was ultimately scrapped by the Liberals.
- Maintain the Clean Fuel Regulations, to achieve a 20% reduction in liquid fuel carbon intensity.
- Invest $5 billion in carbon capture and storage technology, including new tax credits.
- Study a carbon border tariff that would reflect the amount of carbon emissions attributed to goods imported into Canada.
- Develop a National Clean Energy Strategy that will incorporate storage, nuclear, hydrogen and renewables into “Canada’s Grid.”
- Invest in transmission infrastructure to bring clean energy to where it is needed and to support growth in electric vehicles.
- Support building retrofits via “Energy Savings Performance Contracting” to pay for the cost of retrofits via energy savings.
- Invest $1 billion in Small Modular Reactors, for deployment across Canada including in the oilsands.
- Study new taxes on frequent flyers, non-electric luxury vehicles and second homes.
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Mr. O’Toole emphasized that his climate plan underwent independent analysis which found that it would achieve substantially the same emissions reductions as the government’s current plan in 2030, while boosting jobs and the economy.
Political analysis
From a strategic perspective, O’Toole and his team are preempting the election playbook of the Liberal Party of Canada. Every election, the Liberals run two campaign strategies against the Conservatives: Hidden Agenda, and Lend Us Your Vote. This climate plan is aimed squarely at the latter of the two.
Climate change has risen dramatically as an issue of national importance for Canadians over the past ten years. This is especially true amongst left-of-centre voters. With a climate plan that mimics aspects of the Liberal plan, like the Clean Fuel Standard, ZEV strategy and Carbon Border Adjustment, O’Toole is betting that the Liberals’ claim to having a superior climate plan will lose its teeth.
On its surface, O’Toole’s plan looks like a strategy to pull support from the Liberals to the Conservatives, but the strategic voter group this plan is more likely to impact is actually the NDP and Greens. O’Toole is seeking to undercut the Liberal pitch to NDP and Green supporters, which amounts to, “If you don’t vote for us, the Conservatives will win.”
The fewer differentiators the Conservatives have from the Liberals, the less effective the Liberal strategy will be. The Conservative plan puts pressure on the Liberals to find newer ways to differentiate themselves from the Conservatives, pushing them even further to the left than their current agenda.
The dilemma for O’Toole is the balance between neutralizing potential attacks from the Liberals, and remaining true to the core values of the Conservative Party of Canada. This is because the Conservative Party of Canada only works if it remains a united coalition. Introducing a consumer carbon levy, and tough new climate measures for industry, may be a poison pill to the Conservative base. Mr. O’Toole is wagering that he can still count on their support relative to the alternatives.
Liberal reaction
Environment and Climate Change Minister Jonathan Wilkinson was quick to slam the Conservative plan, with the memorable quip, “the Conservatives appear to be proposing a new version of petro points – the more you burn, the more you earn.” He continued to point out the recent vote by Conservative convention attendees against adding additional wording to their policy book that included the phrase “climate change is real.” He also connected O’Toole to the Conservative “resistance” premiers who have worked “to make pollution free.”
One thing is clear – with the release of the Conservative climate plan, pre-election political posturing is well underway. With much of Canada in the grips of a severe third wave of COVID-19, most political observers believe a fall election is looking more likely than a snap spring vote. The Liberals will have their chance to respond on Monday with the first federal budget in two years.