Case Study: Scrap the Carbon Tax?
The Liberal Party’s Justin Trudeau has been highlighting his government’s environmental initiatives, including a controversial carbon tax, as the 2019 approaches. The Prime Minister and his party claims that the tax will both grow the economy and improve the environment.
In early 2018, though, Canada’s most populous province, Ontario, elected a PC government that promised to get rid of Ontario’s cap-and-trade policy in favor of policies designed to foster more business investment and growth even if those investments would cause an increase in carbon emissions. This government was re-elected in 2022.
In late November 2018, General Motors (GM) shocked the government with an announcement that the company planned close a large auto assembly plant in Oshawa, Ontario along with several American plants. GM told both the federal and provincial governments that there was nothing they could do to avert the plant closing. According to GM, changing consumer preferences that favored SUVs and trucks built elsewhere, and rising demand for electric vehicles, contributed to weak demand for the cars built in Oshawa and projections that these cars were unlikely to regain their popularity. In 2020, though, GM reversed themselves during union negotiations and announced some truck assembly would resume in Oshawa albeit with a smaller workforce and many new employees since so many had already accepted transfers, severances and retirement packages. There are now other research and design tasks also being done in Oshawa by GM.
GM’s explanation allowed some, like the Ontario Green Party, to emphasize that the optimal future path for Canada was not traditional manufacturing jobs (which have declined in Ontario), but investments in environmentally friendly innovations like electric cars. However, politicians like Ontario Premier Doug Ford, used the plant-closing to reiterate complaints that Canada’s rules and regulations were unfriendly to business and the government needed to create a more welcoming business environment, especially for manufacturers who create a large number of well-paid blue collar jobs.
Now, oil prices are at record highs and some fear that the Oshawa plant will be shuttered again if demand for trucks declines.
Your job: What stance will most benefit an opposition party?
Pick a major, national opposition political party (NDP or Conservative Party of Canada). Imagine that you have been hired as a political consultant as the party seeks to increase its share of the electorate before the next election.
Please advise the party’s political director, Max D. Vote, on how to best respond to any news of the Oshawa’s plant closing (or some other major closure of an automobile manufacturing facility). Max D. Vote wants to know whether this closing should be an opportunity to criticize the government’s carbon tax plan, framing it as unfriendly to business, or whether the party should embrace at least some aspects of the carbon tax plan in an effort to grow sectors of the economy other than manufacturing and the Alberta oil sands.
Would it be best to differentiate the party from the Liberals on an issue like the carbon tax plan or would it be best if the party [at least partially] supports the government?
The answer to such a question would likely depend on whether or not the carbon tax issue is a) a potential wedge issue, and b) whether one’s own core supporters are likely to support the tax and whether the core supporters are united in that stance.
There is some actual polling data on this question, but it isn’t very current, and basically finds that Canadians broadly support cap and trade and worry about climate change – even supporters of the Conservative Party.[1]
But support in principal for solutions that will resist climate change may erode if people follow their trusted political leader’s views on the issue, or decide that in a time of high energy costs and inflation, that additional costs simply cannot be shouldered now. In other words, you have tremendous leeway to use your best judgement – or even your gut feeling – to answer these questions about core supporters and whether it is a wedge issue. To be realistic, you can assume that at least some Conservative Party supporters are skeptical of any government efforts to intervene in the economy or bring jobs to the country (as well as successfully avert climate change); you should also assume that while many NDP supporters are on the left, the party also enjoys close ties to unions and working class families that have thrived while working in the manufacturing sector – or may be most vulnerable to shifts in consumer prices and therefore most sensitive to additional cost burdens.
Assume that there will be some [inevitable] missteps by the government, and either opposition party can argue that they would be better at implementing green economy initiatives even as they support the general thrust of the carbon tax initiative.
In a letter (or memo), focus on advising your boss on the best political course of action for that party rather than analyzing the merits of the policy. This is not a research paper; nor is what you recommend very important. What matters is that your recommendation is well-justified as the best strategic option for the party.
Your party has five courses of action to choose from. Choose ONE (and only one) of the following:
- Unambiguously support the government’s efforts while promising that as an opposition party, you will continuously monitor the situation to ensure that the government is acting competently and/or as promised (regarding growing the economy and/or improving the environment).
- Emphasize your party’s commitment to doing more to improve the environment (more than the Liberals), even if it means disruptions in the labor market.
- Emphatically blame the government for the Oshawa plant closing, emphasizing your party’s commitment to growing the economy (more than the Liberals), even if it means -at best- limited efforts to improve the environment.
- Emphatically blame the government for the Oshawa plant closing; attribute blame to non-environmental issues like high corporate taxes, weak/strong union workplace rules, the low price of crude oil (which hurts the Alberta oil sand producers and increases demand for SUVs & trucks), or the inability of the Liberals to convince the American government to drop the streel and aluminum tariffs.
- Mute responses regarding the Oshawa plant closing and the carbon tax plan and focus on other issues (at least until the carbon tax plan shows signs of hurting the economy).
[1] If you want to read more, see this short summary of a longer academic article, https://theconversation.com/canadians-in-every-riding-support-climate-action-new-research-shows-122918, the longer academic article, https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0159774 or enjoy this tool that looks at specific ridings: https://www.umontreal.ca/climat/engl/
