Prospects for Integrated Carbon Taxes in Canada: Lessons from Federal-Provincial Tax Coordination

Tracy Snoddon ()
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Tracy Snoddon: Wilfrid Laurier University, https://wlu.ca/faculty-profiles/sbe/tracy-snoddon.

LCERPA Working Papers from Laurier Centre for Economic Research and Policy Analysis

Abstract: The global nature of the climate change externality calls for a global response but so far none has emerged. Instead, climate policies are being implemented by subnational and national governments, resulting in a fragmented policy landscape at the national level. This is certainly the case in Canada. While this outcome is not particularly surprising, from an economics perspective, it is arguably more costly, less efficient, and less effective at achieving emissions reductions than a more harmonized approach. Is this outcome the unavoidable price of Canadian federalism? Is a more harmonized carbon tax approach feasible? This paper considers Canada’s experience with three major taxes, jointly occupied by federal and provincial governments. Despite its highly decentralized structure, Canada has a history of tax harmonization and coordination arrangements for these taxes. By examining the evolution of these arrangements, the paper offers insights on the prospects of adopting a more harmonized carbon tax approach to address climate change.

Keywords: carbon taxes; tax coordination and harmonization; Canada (search for similar items in EconPapers)
JEL-codes: H23 H77 Q58 (search for similar items in EconPapers)
Pages: 23
Date: 2015-05-08, Revised 2015-05-08
New Economics Papers: this item is included in nep-ene, nep-env and nep-pub
Note: LCERPA Working Paper No. 2015-9.
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