Economic expert explains real issues with Quebec's carbon tax system

Professor of economics Vincent Geloso argues that Quebec's implementation of carbon taxes as a cap-and-trade system has failed to adhere to fundamental economic principles.

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Since the rise in the carbon tax on April 1, Canadians have been voicing their opposition and frustration towards the Liberal government.

While most Canadian provinces have reached $80 per tonne for fuels, Quebec, which has its own carbon tax based on a cap-and-trade system with California, maintains the price of carbon at about $57 per tonne. However, there are many misunderstandings about how Quebec operates and who ultimately bears the greater financial burden.

Vincent Geloso, an expert in economic policy, offers a critical perspective on Quebec's carbon tax policies in an exclusive interview for Rebel News. Geloso argues that Quebec's implementation of carbon taxes as a cap-and-trade system has failed to adhere to fundamental economic principles.

He emphasizes the importance of utilizing market signals over regulations to combat greenhouse gas emissions. However, Geloso contends that Quebec has violated these principles by continuously adding regulations without reducing taxes, resulting in a higher tax burden for Quebecers.

Moreover, Geloso highlights the inefficiencies of Quebec's carbon tax system, stating, "The only reason it's reducing emissions is by reducing economic activity rather than changing the types of economic activities that are happening, which is a really, really bad thing."

Asked about a potential solution, Geloso emphasizes the importance of implementing a "good" carbon tax — a price on pollution coupled with tax cuts to incentivize less polluting economic activities. He criticizes the federal carbon tax for failing to adhere to these principles, arguing that it violates the textbook example by not being revenue-neutral and by not replacing command and control policies.

Regarding Prime Minister Justin Trudeau's assertion that Canadians benefit from the carbon tax, Geloso remains skeptical, stating, "I expect that it is probably not wrong but also probably not true either." He emphasizes the economic reality that consumers ultimately bear the burden of taxes, regardless of legal distinctions.

Furthermore, Geloso addresses the misconception that Quebec is exempt from the carbon tax, explaining that while it may not apply directly, Quebecers still bear the cost indirectly through increased prices of goods imported from other provinces.

In conclusion, Geloso asserts that Quebec's carbon tax policies, along with those of Canada as a whole, are flawed and fail to address the root causes of pollution.

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