Post-Pandemic Innovations How North American Businesses are Adapting

Dinner was vibrant and entertaining in both expected and surprising ways. Our host's quick wit and charm were expected, but the unexpected happened when we discussed Britain's global influence. I was surprised to see that the misconception that pervades sententious Canadian discourse of "our role in the world" extended to the British version of the issue. According to one guest—a blustery cove with the stentorian confidence of an Englishman used to living on an ex-pat salary in one of the lesser former colonies—the imminent eclipse of the gerontocratic American empire is the opportunity Britain has been waiting for to reclaim the title of Top Nation. Of course, Britain has more enduring relevance than we do—it helps that they have a mostly-functional military—but on that dubious foundation, this chap would construct a neo-imperialist vision of such burlesque hubris that I half expected him to propose that we sail that night from Greenwich, armed with bread knives and a barrel of Lords' vintage port, to reconquer Mesopotamia. The performance reminded me of Frederick Lee, the last Secretary of State for the Colonies, who must have continued to file his reports, sharpen his pencils, and flirt with the tea lady, carrying on as his predecessors had done for two centuries, naggingly aware that there were no more colonies out there beyond his office door, waiting for someone to turn off the lights (as the government finally did on that office in 1966, though news of it has apparently yet to reach me).

I'm not sure if it's reassuring to learn that our politicians and their panel-show courtiers'

stubborn unreality with the rest of the globe is not unique to Canada. Leaders on both sides of the Atlantic appear to be following in the footsteps of the late General Sir Anthony Cecil Hogmanay Melchett, who said, "If nothing else works, a total pig-headed unwillingness to look facts in the face will see us through." I suppose it "worked" in France's killing fields. Eventually.Whatever your thoughts are on the carbon price as a policy, its days may be numbered. The same government that introduced it dealt the potentially deadly blow. All due to home heating oil. And with seemingly little thinking.Consider this: on October 24, in response to an opposition Conservative MP's request to remove the carbon price from home heating, a government minister rejected the proposal. He stated that carbon pricing "put more money in the pockets of Canadians" and that repealing the levy would "make pollution free again." Okay, fair enough. Whether you agree or disagree, this has been the government's main argument for many years.However, just three days later, the prime minister lifted the carbon price on heating oil in order to "lower energy bills for Canadians."

It was a startling reversal. And a very harmful one.Whether you like carbon

taxes or not, the logic is straightforward: provide an incentive to reduce emissions while allowing individuals and corporations to determine how. Economically, it is less expensive than the alternative, centrally organized regulatory alternatives.It is also fair. Everyone should be charged the same amount for each tonne they emit, whether in Alberta or Nova Scotia, manufacturing or services, large or small. One tonne is the same as another.The government has now rejected all of this.Yes, exemptions are occasionally justified. However, this occurs very seldom. A carbon price encourages individuals to examine the total cost of their actions. Those with simple, low-cost methods to prevent emitting will. However, some (if not the majority) of the acts we take are unlikely to be affected by a carbon tax in the medium run. Economists refer to them as "inframarginal" emissions. If these activities could be identified in advance, exempting them would have no effect on overall emissions. One possible example is the use of diesel to generate electricity in distant northern settlements.

However, such reasoning is ineffective in this situation. Even if such an argument could be made for home heating oil, it would also be valid for natural gas. As a result, the demand to exempt other fuels will only grow.

The federal government has decided that one part of Canada with one type of home

heating is worthy of a carbon tax break, while those living elsewhere using another type of home heating do not," said Alberta's Premier Danielle Smith in response. She's correct. Pierre Poilievre, the federal Conservative opposition leader, agrees and calls for an exception for all sources of heating.Premier Moe of Saskatchewan has declared that SaskEnergy will stop collecting the carbon tax on natural gas on January 1, 2024, rather than simply calling for more exemptions.2The federal government will finally relent.As a result, the adjustment subtly diminishes carbon tax advantages across the board, including for non-exempt fuels. How? Carbon taxes influence behavior not only today in response to current costs, but also in anticipation of future prices. After all, future prices influence current purchases of durable goods such as automobiles and appliances.However, people and businesses will rationally (and presumably properly) anticipate similar carve-outs for additional fuels in the future. The entire future route of Canada's carbon pricing is no longer plausible.Even the "three-year" hiatus for heating oil is most likely permanent.On July 1, the federal government implemented the carbon tax in Atlantic Canada, resulting in a dramatic spike in heating oil prices from $0 to $65 per tonne. That was a huge shock, and it will only get worse in three years when the tax (if it still exists) will be $110 per tonne. If going straight to $65 per tonne was too much, how will $110 be easier?