Carbon Tax Not McGuinty's "First Choice"

It will be interesting to see how the federal Liberal carbon plan is received by the Ontario Liberals. To be fair, you can't just point to proponents to support the idea of why a carbon tax could fly politically. There is potential for some "awkwardness", if the plan is rejected by McGuinty. The Toronto Star has a story, titled "McGuinty at odds with Dion over carbon tax". Not sure if it's more preference than at "odds", but it is relevant:

The tax, which is expected to be a central plank in the federal Liberal election platform, is one way to put a price on carbon and reduce greenhouse gas emissions, but his "first choice" for Ontario is a cap-and-trade system, McGuinty said today.

"It's one of the things that (Premier) Jean Charest and I are going to continue to talk about, to see if we might build the foundation for a national cap-and-trade system," he said.

"Every province has a different economic situation and we feel that from our perspective, a cap-and-trade system is the best way to go," he said.

Brother David:

David McGuinty downplayed concerns that the carbon tax plan could drive a wedge between the Ontario and federal Liberals.

He said he had a "general discussion" with his brother about the merits of one system over another, but said the premier didn't express an opinion about carbon taxes.

"It was more of an exchange of ideas around the two possibilities, the two primary market mechanisms that can be harnessed to achieve the same end, which is a price on carbon," David McGuinty said.

In fact, a federal carbon tax could complement a provincial cap-and-trade system, he said.

"I think what the premier's said is, `Look, given the here and now of the specificity of the Ontario economy, and how we would like to go forward in pricing carbon, we would rather go with a cap-and-trade system first,"' he said.

"But I doubt very much the premier's ruling out the notion of a carbon tax shift."

In the final analysis, the federal Liberals can't afford to have McGuinty completely offside, Ontario is key if the Liberals are to win the next election. That said, if the proposal does bring in a cap and trade component, as well as a tax shift, McGuinty could fall in line, or at least offer tepid approval. Nobody expects Ontario to walk in lockstep with their federal counterparts, but it is probably better that both are hashing out the details now, prior to release.