Which camp will you be in?
With the federal election now behind us, I wanted to share our thoughts on the implications for builders and property owners alike. This was a particularly interesting election, because it was all about climate change. Both Trudeau and Sheer made the carbon tax a central issue of the campaign, and the country appears firmly split along these lines.
With that said, this election is a good gauge of where we stand as a country on the issue of addressing climate change. With the exception of the conservative party, all the other major parties clearly embraced progressive policies on climate and took home a collective 65% of the popular vote. The Green party had their best showing ever, capturing more than 6% of the popular vote and increasing its seat count to 3. The Bloc Quebecois too, fresh off a recent climate march that saw 500,000 take to the streets of Montreal, saw embracing climate action as politically beneficial to them, and as a result reaped 3 times the seats they previously held. Clearly, the nation wants to see action from the government on climate policy.
The most obvious implication of this election is that the previously implemented Liberal carbon tax is likely to stick. Trudeau has so many options to partner with, it seems likely this government will be able to last a lot longer than a traditional minority government. This means that the carbon tax will likely be given the time it needs to ratchet up to a meaningful figure. Given this is a revenue neutral tax, dividends to average Canadians will go up through this period, and I believe public sentiment towards this program will only improve, further entrenching it.
As it currently stands, the carbon tax is only $20 / tonne, but will reach $50 / tonne by 2022. This has real implications for building owners – in 2022, the carbon tax will amount to an additional $8 billion being spent to heat and cool buildings annually. As this carbon tax reality starts to bite more and more, how will consumer behaviors shift? Will homebuyers begin to inquire about the places they choose to live, wanting to understand if their utilities are going to be higher next year as a result of this? As the carbon tax becomes more impactful and ever present in our lives, I believe we will begin to see a more thoughtful consumer that will be thinking ahead, taking the costs into consideration even before the taxes take full effect.
No matter your opinion on how soon these effects will start to manifest themselves, the reality is that Canada is going to be addressing climate change in a meaningful way for the foreseeable future. We all have a choice now – to embrace the change or to resist it. And the way I see it, as the tide turns away from the old ways of doing things to the new, there will be more value accruing to those who embrace than resist. Which camp will you be in?
Written by Lane Theriault