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 Images

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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.

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The 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.

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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.

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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.

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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.

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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.