The cap-and-trade debate
It’s entirely probable that we’ll see another price hike at the pumps come January 1. “Not again!” you’ll say, and with every reason. While some increases are explained by market fundamentals, the one I’m referring to here will arise from the deployment of a new phase in carbon-emission trading that many experts think is premature. If this occurs come New Year’s Day, oil companies will have to participate in the cap-and-trade system and they’ve already made it clear that they intend to pass the cost along to consumers.
Assessments vary, but the most often-quoted figure is an increase of at least three cents per litre. In 2010, for example, 8.5 billion litres of gasoline were sold in Quebec. Based on this number, motorists would have shelled out more than $257 million to the carbon exchange. And with 85.4 percent of respondents to a recent CAA-Quebec survey not realizing that C&T participation by fuel distributors would have such an impact, consumers are in for a big surprise.
The carbon exchange is certainly far from our daily thoughts and concerns, though its “polluter pays” principle is at its core a good idea. It works like this: Businesses that exceed their allowed emissions must buy carbon credits commensurate with their excess, the proceeds of which would then be used to finance mobility projects like public transportation. Exchanges such as this do exist elsewhere, and with some success. The problem here is that Quebec and California are the only participants. According to the experts, more participants are needed with conditions similar to the Quebec market, both geographically and economically. If nothing changes, Quebec’s economy could be placed at a disadvantage vis à vis its neighbours like Ontario. Many stakeholders have made their opposition known – not to the carbon-exchange principle itself, but rather to the economic risks associated with its premature deployment. The government has ignored these opinions, instead giving the impression that what matters
most is to levy a new “tax” at motorists’ expense. We still remember the Green Fund fees that, in 2008, were directly passed on to motorists.
CAA-Quebec will closely monitor the situation. As of this writing, no new partner has emerged and no change is in sight. Meanwhile, our gas is already the highest taxed in Canada.
Richard Lachance,
Président et chef de la direction