Opinion: UN taxes should be a step too far for Canadians

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The cost of shipping and flying will be going upLast updated 29 minutes ago The UN’s unprecedented taxation of aviation and shipping may be a step too far for Canadians who, these days especially, value their sovereignty and independence. Photo by FABRICE COFFRINI/AFP via Getty ImagesTwo UN agencies — the International Maritime Organization (IMO) and the International Civil Aviation Organization (ICAO) — plan to tax global shipping and flights on their greenhouse gas emissions. If implemented, the UN levies will raise global shipping and international flying costs, adding to global inflation. They would also be an important precedent, increasing the power and expanding the budgets of unelected institutions.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThis advertisement has not loaded yet, but your article continues below.This fall the IMO holds a final vote on its carbon tax. ICAO’s requirement to purchase carbon offsets for emissions from international flights becomes mandatory in January.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe Trudeau government supported the initial decisions to levy carbon taxes for shipping and require carbon offsets for aviation. In light of the Carney government’s suspension of the consumer carbon tax, however, and given the current state of the economy, Canadians should take a new look at Ottawa’s support for the global carbon taxes. Though they largely support global climate-change policies and view the UN positively, Canadians are also, especially in the Trump era, fierce defenders of their sovereignty. They shouldn’t support unelected UN bureaucrats taxing them.Although shipping produces just two and a half per cent of the world’s greenhouse gas emissions a UN tax on global shipping would add to the price of every shipped good in the world. Shipping fuel prices would double. Ships currently move 80 per cent of global trade, a share that is expected to grow. The IMO estimates the planned tax would increase its budget by $11 billion to $13 billion a year — likely without lowering emissions appreciably since there simply isn’t enough no-carbon or low-carbon fuel available that meets the IMO’s criteria. The IMO does not count liquefied natural gas (LNG) as low-carbon, though it is widely available, and its global production could be ramped up, including in Canada.This advertisement has not loaded yet, but your article continues below.Aviation’s share of global greenhouse gas emissions is also small, just 2.5 per cent. Even so, in 2024 ICAO elevated net-zero in aviation to be on a par with its long-standing goal of zero aviation fatalities. Because “sustainable aviation fuel” accounts for less than one per cent of global aviation fuel consumption, ICAO’s requirement that airlines purchase carbon credits will add costs to international flights without reducing emissions much.Little public debate or Canadian media coverage preceded the Trudeau government’s votes in support of the global carbon taxes. Although public pushback against the national carbon tax was robust, the Canadian public hardly noticed the planned global carbon taxes. The Conservative party did register its opposition, claiming the taxes would be inflationary, result in Canadian job losses and lead to Canadian funds being sent abroad. The Canadian Taxpayers Federation was also opposed, arguing that according to IMF data the two initiatives would cost Canada half a per cent of GDP.The Trump administration is working to stop the imposition of the UN agency taxes. If Canada implements the shipping and aviation taxes, while the United States does not, this will create new challenges for the Canadian industries. Many international travellers from Canada would be even more likely drive to U.S. airports, further depriving Canadian airlines of revenue. American ports and shippers would gain a similar advantage over Canadian ports, as well.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Ottawa’s positions on the global carbon taxes on shipping and aviation are bound to affect relations with the United States. The Trump administration will likely take forceful action to prevent implementation of the new taxes. Canada may want to avoid a new confrontation with the U.S. and join Greece, Japan, Argentina and Italy in voting against the IMO’s proposed carbon tax and encourage countries organizing to prevent implementation of the aviation tax.The UN’s unprecedented taxation of aviation and shipping may be a step too far for Canadians who, these days especially, value their sovereignty and independence. Many in Canada view climate change as a major problem. But taxation by unelected institutions is not the way to address it.Brenda Shaffer, faculty member at the U.S. Naval Postgraduate School’s Energy Academic Group, is a senior fellow at the Atlantic Council’s Global Energy Center.We apologize, but this video has failed to load.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.