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Stephann Sahmkow
Stephann Sahmkow is a student in Political Science and Economics at Concordia University

Michael Chong – A Conservative Leader

 

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On the eve of the vote for the leadership of the Conservative Party of Canada despite a contentious environment there has been a topic on which most of the leadership candidates, but one, have sided together on: “A carbon tax is a Liberal Policy to take money out of the pockets of Canadians and limit market competition in Canada”.

These have been the most used words by the overall body of the CPC at every leadership debate since Prime Minister Justin Trudeau proposed his plan for a carbon tax. However, one candidate, Michael Chong, who has also been labelled as “The Red Tory”, has challenged this view by proposing a “revenue neutral carbon tax”, framing it as a key component of the most policy focused Conservative platform yet presented in the leadership race.

The question arises, can a Carbon Tax ever be called a Conservative policy?

Chong’s plan offers to control Green House Gas (GCH) emissions. However, by doing so Chong is also proposing the elimination of other more economically inefficient measures to curb GCH emissions such as fuel and coal-fired electricity regulations that directly affect the price of the energy sector that serves millions of Canadians. Furthermore, Chong is proposing to cut personal and corporate income taxes by 10% and 5% respectively. In Canada, specifically in Alberta where the marginal cost of fund is the highest, the cost of reducing a dollar of corporate income tax encourages firms to invest around 60$ on capital. Investment in capital is usually directly followed by investment on labour, new jobs and employment opportunities.

Chong is also proposing that revenues generated from the carbon market will allow him to cut three of the five tax income brackets, followed by the doubling of working income tax benefits for low-income Canadian families allowing them to double their available disposable income for household consumption. Chong is proposing a new carbon credit built into the GST/HST that could possibly lead to the creation of the right economic scenarios for capital investment in new sectors of the Canadian economy.

The opposition by other leadership candidates to a carbon tax is based on the premise that the tax will violate core principles of the party such as fiscal accountability, individuals’ rights and freedoms and a competitive economy. Thus, anything that aims to be considered Conservative in Canada needs to avoid violating these guidelines. However, standard champions and intellectuals of all these conservative principles such as Milton Friedman and Reagan Republicans have let clear that polluter payments are a recognized component of free market economic theory. Furthermore, Chong’s plan is proposing, a) to put more money into the pockets of Canadians by cutting both personal and income corporate taxes, and three of the five tax income brackets in Canada, and b) introducing higher tax working benefits to help the lower income Canadians enter the middle class.

Finally, Chong is also promoting market competition by adding a carbon credit inside the GST/HST. Therefore, the evidence that shows the Conservative ideology of Chong’s platform is substantial. Furthermore, Chong has already received the endorsement from multiple free market economists that approve his plan. Stephen Gordon, professor from Laval University, lays it clearly: “This is quite remarkable; CPC leadership candidate Michael Chong pitches tax overhaul based on carbon tax […] If you’re a Conservatives who a) takes economics seriously and b) genuinely favours small government, Michael Chong’s platform is worth a look”.

It looks like Chong still has some work to do to before convincing the members of his party. Nonetheless, despite opposition Chong has shown the necessary amount of leadership to oppose controversy and not only be the only candidate on the CPC leadership race to present a price to control GCH emissions, but a candidate with a clear idea of how he wants the Conservative Party of Canada to look under his leadership.

The Prince Arthur Herald

Photo Credit: Twitter, @Manningcentre

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