Canada’s Liberals Propose a Tax on Carbon in “Green Shift” Plan

The leader of Canada’s Liberal Party, which is now out of power, has called for a modest tax on most carbon-based fuels. The tax, part of a “Green Shift” program unveiled by party leader Stephane Dion, would be levied on fuel oil, diesel, natural gas, coal and jet fuel and would generate roughly $15 billion in revenues in its fourth year. Dion said the tax of $10 per ton on carbon emissions would encourage conservation, and he vowed to offset economic hardships imposed on consumers with cuts in income taxes. Calling for such a tax at a time of soaring energy prices is a risky strategy, but Liberal Party leaders believe progressive environmental policies can help them defeat the Conservative Party in the next national vote, scheduled for October 2009. Prime Minister Stephen Harper dismissed the Liberal plan as “crazy economics.” Some environmental leaders said a carbon tax would have to be far higher, perhaps as much as $75 per ton by 2020, to stimulate widespread conservation measures and development of renewable energy sources.