This article was written by Catherine McKenna and was published in the Toronto Star on November 3, 2023.

CATHERINE MCKENNA IS THE FORMER MINISTER OF ENVIRONMENT AND CLIMATE CHANGE WHO, IN 2017, INTRODUCED CANADA’S NATIONAL CARBON PRICING SYSTEM. SHE IS THE CEO OF CLIMATE AND NATURE SOLUTIONS.

Canadians know that extreme weather caused by climate change — devastating wildfires, storms, floods — is already costing us billions of dollars. Canadians can also see we are now in a global race with the United States, Europe and China to attract investment in clean energy that creates growth and good jobs.

So you would think that serious politicians would at last agree that carbon pollution can’t be free — that it should be priced with predictable increases to encourage people and businesses to choose cleaner, less expensive energy solutions that also create good jobs and grow our economy.

You would be wrong.

But then life is full of ironies. Using pricing to change behaviour is a strategy drawn from any conservative playbook. By setting a price, a market can work its magic and people can make the best choices for their businesses and families.

This is the logic at the heart of Canada’s approach to meeting its climate commitments and driving carbon pollution out of our economy and environment.

But because I’m not a conservative and know that markets often hurt people who can least afford it, I made sure that the federal approach to carbon pricing had a special protection built in: it’s revenue neutral. This means that the money raised by putting a price on carbon is transparently rebated in the form of a quarterly Climate Action Incentive rebate made directly to Canadians’ bank accounts.

This isn’t something I expect our political opponents to advertise, but it doesn’t stop it from being true. Nor does it change the fact that Canada’s carbon pricing system follows the same approach successfully pioneered by conservative politicians.

Think prime minister Brian Mulroney and acid rain, or premier Gordon Campbell, who created Canada’s first carbon pricing system in British Columbia. Quebec premier Jean Charest made common cause with the all-American Republican governor Arnold Schwarzenegger to set up a carbon market that, despite opposition in Quebec and California, propels both economies forward.

So on one hand we have today’s Conservatives who refuse to take lessons from their own. On the other, let’s remember that while we are in a fossil fuel climate crisis, the oil and gas industry is playing a double game. They are generating massive profits that they return to their shareholders while charging consumers exorbitant prices. At the same time they are demanding huge public subsidies to clean up the pollution they cause, while walking away from their already modest climate commitments.

We keep overlooking this fact: The skyrocketing price of heating oil and gas being paid by Canadians isn’t caused by the carbon price where all the money is given back. It’s the skyrocketing price of heating oil and gas being charged by large oil and gas companies.

This, incidentally, is why an oil and gas windfall tax is long overdue. It would address the climate crisis and improve affordability by giving that money back to families to help them get off fossil fuels and transition to cheaper, cleaner energy.

According to the Parliamentary Budget Office, if the same windfall tax currently paid by Canadian banks and insurance companies was paid by the largest Canadian oil and gas companies, proceeds would reach $4.2 billion in just five years. That would buy a lot of heat pumps.

Let’s not lose focus. The problem here isn’t carbon pricing. It’s the price of fossil fuels. As Clean Energy Canada has made clear, “fossil fuel inflation is the culprit for skyrocketing heating oil prices.” The sooner heating systems relying on fossil fuels are switched out — all across Canada — for cold-climate heat pumps, the better for consumers and for the planet. And a windfall tax can help Canadians get it done.