OTTAWA—Federal Conservative leadership candidate Michael Chong is proposing a dramatic overhaul of the tax system based on new revenues from taxing carbon.
Chong says his plan would cut overall federal income taxes by 10 per cent and corporate taxes by five per cent—while imposing an escalating tax on carbon emissions that would rise to $130 a tonne by 2030.
Chong, one of nine confirmed entrants in the Conservative race, says Canada already has a working model of a truly revenue-neutral carbon tax in British Columbia.
But he’s breaking with almost a decade of Conservative party orthodoxy on carbon pricing, which Chong’s colleagues have consistently critiqued as a job-killing tax on everything.
Conservatives also insist carbon taxes will put Canada at a competitive disadvantage with the United States, the country’s dominant trading partner.
But Chong, a Toronto-area MP since 2004, says his plan is based on conservative principles using market mechanisms that will get Canada to its 2030 international emissions-cutting target while boosting economic growth.