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Climate Policy on Thin Ice: A Lesson from Canada
Canada’s experience with its carbon price-and-dividend system for fossil fuels has important implications for the rest of the world, including the United States.
May 12, 2025
The recent news coverage of Canada’s elections was all about the spectacular backfiring of President Trump’s strong-arm tactics—tariffs and the pipe dream of Canada becoming the “51st state” sparked the Liberal Party’s stunning come-from-behind victory under its new leader, Mark Carney. But behind the headlines, the Canadian elections also carry a profound cautionary tale about the political mishaps that can befall even the best-designed climate policy.
Until Trump barged onto the scene, climate change was the single most visible issue in the election campaign. Carney, the former UN Special Envoy for Climate Action and Finance, called it an “existential threat.” His Conservative Party opponent, Pierre Poilievre, instead pledged to roll back regulations on fossil fuel emissions and scrap Canada’s most ingenious climate policy: its carbon price-and-dividend system.
Under former Prime Minister Justin Trudeau in 2019, the Canadian government had introduced a price on carbon pollution and recycled the revenue straight back to households—the first enactment anywhere of the “carbon dividend” policy widely advocated in the U.S. by economists from across the political spectrum.
Dividends make it possible to use this tool while protecting the living standards of working families.
The policy succeeded in reducing emissions while at the same time raising the incomes of most Canadian households more than enough to offset the impact of the carbon price—a win-win for the environment and the people. Yet Poilievre’s vow to “ax the tax” became so popular among voters that Carney himself scuttled the policy upon replacing Trudeau as Liberal Party leader in March.
Why did a successful climate policy go down to defeat in the court of public opinion?
The policy’s aim was to give consumers and businesses an incentive to reduce emissions while letting them choose what worked best for them. Returning the revenue directly to the public safeguarded the purchasing power of ordinary households, a prerequisite for ensuring equity and political durability. Most Canadian families came out ahead—an analysis by the Canadian government found that about 80% of households experienced net income gains, their dividends being boosted by the outsized carbon consumption of the most affluent consumers.
Predictably, Trudeau’s conservative opponents denounced the policy. Poilievre incorrectly labeled it a “tax” and blamed the policy for any and all fuel price increases, including those triggered by the worldwide spike in oil prices after Russia’s invasion of Ukraine, while remaining notably silent on the return flow of the carbon revenue back to households.
The Trudeau administration meanwhile did little to publicize the benefits of the policy to consumers, evidently assuming Canadians would figure out themselves that they were receiving dividends and that they more than compensated for the carbon price. This lack of visibility was compounded by how the payments were delivered. Initially they were buried in income tax returns. When this changed to electronic bank deposits, they were inscrutably labeled, appearing on statements simply as “Canada Fed” or a random string of numbers and letters. The neglect of messaging proved to be the policy’s Achilles heel.
Canada’s experience has important implications for the rest of the world, including the United States. Although it may seem hard to imagine in our present political moment, sooner or later climate policy is all but certain to return to the nation’s political agenda. When it does, carbon pricing will re-emerge as a key tool for curbing emissions.
Dividends make it possible to use this tool while protecting the living standards of working families. The Healthy Climate and Family Security Act introduced in December by Sen. Chris Van Hollen (D-Md.) is a good example of legislation that would do precisely this. But to win and maintain public support for the policy, transparency is crucial: the dividend that households receive must be just as visible as the gasoline prices they pay at the pump.
In Canada, Carney has promised to continue the carbon price for heavy industrial emitters, while offering incentives for consumers to reward “green choices” such as purchases of electric vehicles. But carrots alone will not bring about a clean energy transition. Climate catastrophes have already begun. If we want to keep them from worsening, the take-home lesson from Canada is that any serious climate policy will require an equally serious commitment to making its benefits clear and present.
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Ontario 'Ripping Up' Contract With Musk's Starlink as Canada Targets Trump Allies in Trade War
"Canada didn't start this fight with the U.S., but you better believe we're ready to win it," Ontario Premier Doug Ford said.
Feb 03, 2025
Ontario Premier Doug Ford said Monday that his government will exclude American companies from provincial contracts and cancel a massive deal with Elon Musk's Starlink satellite internet service in retaliation for U.S. President Donald Trump's imposition of 25% tariffs on Canadian goods.
"Starting today and until U.S. tariffs are removed, Ontario is banning American companies from provincial contracts," Ford—who leads the Progressive Conservative Party of Ontario—said on social media.
"Every year, the Ontario government and its agencies spend $30 billion on procurement, alongside our $200 billion plan to build Ontario," he continued. "U.S.-based businesses will now lose out on tens of billions of dollars in new revenues."
"They only have President Trump to blame," added Ford, who once professed his "unwavering" support for the Republican during his first White House term. "We're going one step further. We'll be ripping up the province's contract with Starlink. Ontario won't do business with people hellbent on destroying our economy. Canada didn't start this fight with the U.S., but you better believe we're ready to win it."
"I don't care if it's a toothpick. We need to purchase from Canada and Ontario."
Last November, Ontario and Starlink signed a C$100 million (USD$68.6 million) deal to provide high-speed internet service for around 15,000 eligible homes and businesses in remote rural communities in northern parts of the province by June 2025.
However, Ford on Monday accused Musk—who gave Trump's campaign tens of millions of dollars and heads the president's Department of Government Efficiency (DOGE)—of being "part of the Trump team that wants to destroy families, incomes, destroy businesses" by waging a trade war.
"He wants to take food off the table of people, hard-working people, and I'm not going to tolerate it," Ford said of the world's richest person. "We just aren't going to be using American companies."
"And no matter if we are building a hospital, if we're building anything, if we're building a dog house, I want to make sure we are using Ontario steel, Canadian products, Canadian wood, Ontario wood," he added. "I don't care if it's a toothpick. We need to purchase from Canada and Ontario."
Ford also ordered the Liquor Control Board of Ontario (LCBO) to remove U.S.-imported alcohol products from store shelves in retaliation for the tariffs.
"Every year, LCBO sells nearly $1 billion worth of American wine, beer, spirits, and seltzers," he said on Sunday. "Not anymore."
Musk reacted to the loss of the Starlink contract with Ontario with a two-word post on his X social media platform saying, "Oh well."
Ford's move followed Canadian Prime Minister Justin Trudeau's announcement Saturday of retaliatory tariffs targeting Republican-led states and Trump allies after the U.S. leader said he would impose levies of 25% on Canadian and Mexican imports and 10% on goods from China.
"Canadians understand that we need to respond to this," explained Trudeau, who is set to resign once his Liberal Party selects a new leader. "We need to respond in a way that is appropriate, that is measured but forceful, that meets the moment."
Trump singled out Canadian energy for a reduced 10% tariff. On Monday, he announced a deal with Mexican President Claudia Sheinbaum to pause U.S. tariffs for one month in exchange for the deployment of 10,000 Mexican troops to the country's northern border to target drug trafficking and, according to Trump, prevent migrants from entering the United States.
Frustration with Trump's policies and actions—which include ongoing calls to make Canada the "51st state"—was on display over the weekend as Canadian fans attending National Basketball Association and National Hockey League games against visiting U.S. rivals loudly booed pregame performances of "The Star-Spangled Banner."
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Harris, Trudeau, and the Fall of Our Noeliberal Saviors
What is that lesson that corporate-friendly so-called "centrists" refuse to learn? That you cannot save democracy while preserving the very economic and political arrangements that have hollowed it out.
Jan 08, 2025
Justin Trudeau's resignation and Trump's looming return on the anniversary of January 6 mark not just the resurgence of the far-right, but perhaps final collapse of centrist delusions.
There's a bitter poetry to the timing. On January 6, 2025—exactly four years after Trump supporters stormed the U.S. Capitol in a violent attempt to overturn democracy—two events crystallized the profound failure of liberal centrism. In Ottawa, Justin Trudeau, once the global poster child for progressive liberalism, announced his resignation as Canada's Prime Minister. Meanwhile in Washington, Donald Trump prepared to return to power, having decisively defeated another supposed liberal savior in Kamala Harris.
The convergence of these events represents more than just the latest episode in the ongoing crisis of liberal democracy. It marks the definitive end of an era defined by a particular political fantasy: that charismatic centrist leaders could somehow save liberal democracy from its own contradictions while preserving the very system that produced its decay.
The Liberal Savior Myth
At the heart of contemporary liberalism lies a seductive myth: that the right combination of charismatic leadership, technocratic competence, and moderate politics can save democracy from its enemies while avoiding fundamental social transformation. This "liberal savior" narrative has dominated centrist political imagination for the past decade, manifesting in figures from Emmanuel Macron to Pete Buttigieg.
The limits of liberal centrism proved fatal. Unable to deliver material improvements in people's lives while preserving the interests of their donor class, these supposed saviors watched their support collapse.
The myth operates on two levels. First, it suggests that individual leaders—through force of personality, rhetorical skill, or managerial expertise—can resolve deep structural crises without challenging the underlying power relations that produced them. Second, and more insidiously, it promotes the idea that liberal democracy itself can be saved simply by defending existing institutions rather than radically democratizing them.
This mythology reached its apotheosis in Justin Trudeau. Young, photogenic, and armed with progressive rhetoric, he seemed to embody everything liberals believed could defeat the populist right. Here was a leader who could speak the language of social justice while reassuring financial markets, who could kneel at Black Lives Matter protests while expanding oil pipelines, who could champion feminism while maintaining corporate power structures.
The same template was later applied to figures like Joe Biden and Kamala Harris, both presented as the noble defenders of democratic norms against Trumpian barbarism. Yet in each case, the fundamental contradiction remained: you cannot save democracy while preserving the very economic and political arrangements that have hollowed it out.
The Rise and Fall of Justin Trudeau
Trudeau's trajectory is especially revealing. In 2015, he rode to power on a wave of optimism, presenting himself as the progressive antidote to conservative rule. With his carefully cultivated image of youthful dynamism and performative embrace of diversity, he became the archetype of what liberals imagined could defeat the rising tide of right-wing populism. International media swooned over his "sunny ways" and apparent commitment to progressive causes.
The reality never matched the image. Behind the woke platitudes and photo ops, Trudeau's government consistently served the interests of Canadian capital. His administration expanded oil pipelines despite climate crisis rhetoric, continued selling arms to Saudi Arabia while claiming to champion human rights, and used federal power to crush labor resistance, as seen in his government's draconian response to postal worker strikes.
The contradictions only deepened over time. While Trudeau spoke eloquently about reconciliation with Indigenous peoples, his government aggressively pursued resource extraction projects on unceded territories. He campaigned on electoral reform but abandoned it when he couldn't secure a system favorable to his party. His supposed feminist credentials were exposed as hollow when he forced out strong women in his cabinet who challenged his authority during the SNC-Lavalin scandal.
The Myth of the Liberal Savior
This gap between progressive aesthetics and neoliberal governance isn't a bug but a feature of the liberal savior model. Figures like Trudeau fundamentally misunderstand democracy as a system to be preserved rather than radically expanded. Their project was always about maintaining the status quo through a kind of repressive tolerance – allowing just enough progressive window dressing to deflect demands for structural change while keeping the fundamental power relations of capitalism intact.
This gap between progressive aesthetics and neoliberal governance isn't a bug but a feature of the liberal savior model.
The same dynamic played out in the United States. After Trump's 2020 defeat, Democrats assured voters that "normalcy" would be restored under Joe Biden. When his presidency floundered, they turned to Kamala Harris as the next great hope for defending democracy against Trump's return. Yet as with Trudeau, the limits of liberal centrism proved fatal. Unable to deliver material improvements in people's lives while preserving the interests of their donor class, these supposed saviors watched their support collapse.
The liberal savior myth rests on two fundamental delusions. First, that individual leadership qualities—whether Trudeau's charisma or Biden's experience—can overcome the structural crisis of legitimacy facing liberal democratic institutions. Second, that these institutions can be preserved in their current form while addressing the deep inequalities and democratic deficits that fuel right-wing populism.
The Structural Crisis of Liberal Democracy
This approach was always doomed to fail because it refused to acknowledge that liberal democracy's crisis stems from its own internal contradictions. The same free market capitalism that centrist leaders champion has hollowed out democratic institutions, atomized communities, and created the precarious conditions that drive authoritarian appeals. No amount of symbolic progressivism or calls to preserve norms can resolve this fundamental tension.
The same free market capitalism that centrist leaders champion has hollowed out democratic institutions, atomized communities, and created the precarious conditions that drive authoritarian appeals.
The failures of figures like Trudeau reveal the bankruptcy of what have called "repressive democracy"—a system that maintains the formal structures of democratic governance while emptying them of substantive content. Under this model, democracy becomes primarily about managing dissent rather than enabling genuine popular power. Elections serve more to legitimate existing power structures than to facilitate real political transformation.
This crisis has only deepened in recent years. As economic inequality has soared and climate chaos intensifies, liberal democratic institutions have proven increasingly incapable of addressing fundamental social problems. The response from centrist leaders has been to double down on technocratic management while wrapping themselves in progressive rhetoric—a strategy that has now definitively failed.
Beyond Liberal Democracy: Building Socialist Alternatives
The real question is not how to save liberal democracy, but how to transcend it through the creation of genuine democratic alternatives. This requires moving beyond both right-wing populism's false promises and liberal centrism's managed decline. Instead, we need a democratic socialist vision that expands democracy into all spheres of life—economic, social, and political.
This means building power from below through militant labor movements, tenant organizations, and community groups that practice genuine democratic decision-making. It means fighting for universal public goods and democratic control over the economy. Most importantly, it means rejecting the liberal belief that democracy is primarily about preserving institutions, and embracing it as an ongoing project of collective liberation.
The real question is not how to save liberal democracy, but how to transcend it through the creation of genuine democratic alternatives.
Practical examples of this alternative vision are already emerging. The recent wave of labor militancy across North America shows how workers can exercise democratic power outside traditional political channels. Municipal socialist movements are experimenting with participatory budgeting and community control. Indigenous land defenders are modeling forms of democratic governance that challenge both liberal capitalism and right-wing reaction.
Trudeau's fall and Trump's return should serve as the final nail in the coffin of the liberal savior myth. The choice we face is not between liberal democracy and authoritarianism, but between the expansion of genuine democratic power or its continued erosion under the twin forces of right-wing reaction and centrist accommodation. The only way to defeat the far right is to build democratic socialist alternatives that actually address the crisis of democracy at its roots.
The future depends not on enlightened leaders preserving the status quo, but on ordinary people organizing to fundamentally transform it. The fall of figures like Trudeau should not be mourned but celebrated as an opportunity to finally move beyond the dead end of liberal centrism and begin the real work of democratic reconstruction.
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