Thursday, May 8, 2008

A Bold Environmental Policy

Now this hasn’t been officially rolled out, but I think this is the kind of approach we need to show Canadians we have a serious plan to combat global warming:

The plan, according to sources, would shift the 10-cent federal excise tax on a litre of fuel at the pumps into a broad-based carbon tax that would also apply to other fuels, such as for home heating. Sources say that the plan would not add more taxes to gasoline.

But the key is that the money raised – estimated as much as $17-billion – would be returned to middle-class and working Canadians in personal income tax cuts, making it revenue neutral. There could be corporate tax cuts as well.

Some people are skeptical, including a “veteran” (probably John Turner years) Liberal strategist that always pops up in a Jane Taber piece (why those anonymous Liberals think they are helping the party with such comments is beyond me), but I think we need to give Canadians a lot more credit than those worried about a policy like this this are doing.

Canadians could understand five simple things:

1) We need to be doing much more to be combating global warming. The Carbon Budget was a start but this builds on that and is even more bold. Conservatives have put our reputation in the dumps (especially at Bali), we should be seen as a leader and not a laggard on this issue.
2) In a time of economic uncertainty, we want a plan widely endorsed by economists. This one is.
3) You won’t be paying more at the pump with this proposal.
4) You won’t be paying more taxes overall with this proposal. It is a tax shift not a tax increase.
5) If you are someone who doesn’t consume much energy you will come out ahead.

The important thing though is that Liberals frame this issue before the Conservatives do.

Though I have faith in Canadians that they would embrace a plan like this and so far I would say that the evidence shows that I am right.

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The Grumpy Voter said...

This is a baked policy. Show me stats suggesting that Canadians want to pay more at the pumps in the name of "bein green" and I will show you a bald headed sheep. Moreover, Canadians don't want tax relief on the high price of fuel through income tax cuts - they want to see that $1.30/litre they pay each time REDUCED immediately.

Liberals are going to get clobbered on this. Really bad bad bad public policy.

wilson said...

From the article:
'...But the key is that the money raised – estimated as much as $17-billion offering corresponding personal income tax cuts of between $10-billion and $13-billion to working Canadians...'

Bye bye $4 to $7 BILLION, there's the price to taxpayers.

When dion says 'revenue neutral' he means taxpayers pick up the cost of the program...estimated at $4-7 BILLION.
That's 4 gun registries.

Danielle Takacs said...

Grumpy I showed you a very recent poll that shows that Canadians are willing to pay more and pointed out that this policy does NOT increase the price of gas at the pumps and you ignored both.

And I know it's not a Canadian example, but in the U.S. we recently had Hillary Clinton promising to lower the price of gas and Obama refusing to do so. That was the dominant issue in many of their ads leading up to the votes in Indiana and North Carolina. You tell me who had the better night this past Tuesday? Even though it wasn't in Canada it was a clear test of whether lowring the price of gas would sell at the polls and it didn't. Not to mention that here in Canada the Conservatives aren't offering to lower the price at the pumps and the Liberals aren't proposing to raise it so I don't see how you think this leads voters over to the Conservatives. People who are environmentally conscious will have MORE money in their pockets under this plan than they currently do and the plan is designed so the rest come out about even.

Wilson: You are just grasping at straws, hoping to pick out numbers that suit your ends. When the policy is officially released I'm sure it will be fully costed and balanced to ensure it is essentially revenue neutral, till then you are just engaging in willful distortion of what the policy is here.

Canadians will be looking for the best party to manage the economy AND the environment and the verdict will be extremely clear who has the best plan for both.

The Grumpy Voter said...

>>Grumpy I showed you a very recent poll that shows that Canadians are willing to pay more and pointed out that this policy does NOT increase the price of gas at the pumps and you ignored both.<<

The poll ignores one very basic question: are you prepared to accept higher gas taxes in the name of the environment?

Moreover, I didn't ignore your spin on how this policy will not impact the price at the pumps and I frankly, don't believe you or the policy itself. Canadians want immediate relief, not some retarded income tax return they get once a year. We want cheaper gas. Liberals are going to wear this big time.

Danielle Takacs said...

Here are the numbers:
A carbon tax on people and businesses based on the carbon emissions they generate. Sixty-one per cent agreed and 32 per cent disagreed with the idea.

– A carbon tax for businesses and people, if the generated cash were spent on incentives for eco-friendly behaviour and renewable energy. Seventy per cent agreed and 22 per cent disagreed.

– An environmental usage charge that would apply to people and businesses who use above-average amounts of fossil fuels, water or electricity, or who produce more garbage. Seventy-three per cent said they would and 20 per cent said they would not.

– An environmental tax refund paid to people who reduce their use of fossil fuels, electricity and water, and who produce less garbage. Eighty per cent said they would and 16 per cent said they would not.

That's the some pretty strong support for tax shifting like the policy outlined in the Globe. Can you point to any recent poll that says Canadians would vote for someone that lowered the price of gas?

Again the idea of a gas tax holiday didn't fly South of the border this past week, why would it here?

So I think the evidence weighs more heavily in favour of this policy being a winner than a loser wouldn't you say? If not, please respond with sound recent evidence to the contrary.

I'm also surprised you would say "Canadians want immediate relief, not some retarded income tax return they get once a year"
I agree the Liberal proposal can't provide immediate relief (which isn't necessarily provided by lowering gas taxes anyway), but when you cut income taxes (which is what is being proposed here) that adds up to relief on EVERY pay check after the tax cut comes into place. So if you are environmentally friendly then that is more money back in your pocket every week or two weeks than you would get from a gas tax cut. That's the bottom line and that's why this policy would work and sell with Canadians, not to mention this policy is good for economy AND the environment.

Mushroom said...


I am saying this as a supporter of a carbon tax. The truth is that how can it be "revenue neutral" when North Americans are not paying market value for petrol? Norway and the UK charges $2.50 a litre and that is with North Sea oil as their major economic generator. Secondly, if the Grits want a carbon tax to be revenue neutral, why are we voting with the Cons on C-333 to support the production of ethanol? The poor are now suffering due to the increase in the price of corn, which affects everything from Hostess Twinkies, Popsicles, and mixed vegetables.

wilson said...

''it is essentially revenue neutral''

Revenue neutral simply means that the government will spend everything it takes in, on enviro policy;
won't put any extra cash into general revenues.
It doesn't mean your income tax deduction will match what the government takes...thats the figures $17 B in with $10 B refunded to taxpayers, $4-7 B of the tax collected will run the program.
I'm not making this up.

Danielle Takacs said...

Wilson: Again until the real numbers are on the table, your guesses about how large the tax cuts will be is pure speculation and therefore, at this point, baseless.

In the end my point remains that this tax shift approach would be one that is supported by economists and those concerned about the environment (which is a large majority of Canadians as shown in the cited poll). It's good policy and it can sell with Canadians.

Mushroom: I don't think we should be comparing petrol prices for European countries to Canadian ones at this point (they are just too far apart). Environmental policy in this country will have to move in incremental approaches or else then the public would reject it (and then nothing would be done), so I'm glad to see the Liberals are moving in a progressive direction on this. I'm not so sure the public would stomach any further increase in gas taxes at this point and this policy doesn't contribute to that. What was outlined in the Globe seems like an ideal approach for now.

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