Friday, June 20, 2008

The Green Shift: The Right Plan to Make Canada a World Leader Again

Yesterday Canadians saw a party leader willing to take the necessary steps to protect our environment and economy in the most fair and equitable way. The Green Shift stands miles ahead of anything else other parties have on offer as the most effective way to combat climate change, while transforming our tax system in a way that makes the most sense for stimulating work and investment in the kinds of technologies we want our companies investing in.

Opponents will continue to fear-monger and engage in semantic debates in an attempt to distract, but those who believe there could be a perfect policy that is painless for every Canadian are delusional really don’t have business being in government. With the Green Shift in place the ONLY people that will pay more will be those who pollute more than they should. The plan creates a strong incentive to be environmentally friendly and given the ample evidence that people respond to appropriate price signals will therefore decrease our greenhouse gas emissions and SAVE many Canadians money overall each year of this plan and that’s the bottom line. I think each of the arguments coming out against this plan are easily addressed and one can see this is about the most balanced plan you could possibly put forward to accomplish the goals it sets out to do.

The Conservative Arguments

It would seem the Conservative response is to pretend they didn’t praise Gordon Campbell’s revenue neutral plan and call Stephane Dion a liar who can’t be trusted when he says all the money collected from a carbon tax will be returned to tax-payers. I think Stephane Dion was good to call them out on this when he asked blatantly today “are they calling Gordon Campbell a liar too?” You can’t have it both ways Stephen Harper. B.C. showed it can be done and the Liberals will enshrine IN LAW that all dollars raised by a carbon tax MUST be returned to taxpayers. This is little different than Conservative promises to return all money saved on interest on Canadian debt paid off through future tax cuts (so any money saved on interest is returned to taxpayers). Liberals will similarly enshrine in legislation that added any added revenue must be returned to taxpayers. To say the Liberals would go back on such a central platform claim of doing just that is really hard to believe given Stephane Dion’s reputation for sound integrity that is recognized by ALL parties. And if Conservatives want to turn around and say tax credits are really spending programs and therefore the plan isn’t literally “revenue-neutral” well then the Conservatives are going to have to go back and re-write all their press releases on past budgets of theirs that called tax credits “tax relief” or even “tax cuts”: they may want to have it both ways but Canadians are smarter than that as we know the Conservatives were the kings of putting in place tax credits. The difference is for Liberals there is a compelling rationale for each one based on need and fairness and encouraging investments, while for Conservatives their tax credits come largely from focus-groups and polling in a bid for a few extra votes.

Also to act like Stephane Dion changing his mind on carbon taxes is some big sign of his dishonesty is a bit rich coming from the man who famously promised not to tax income trusts and then with no prior notice did so anyway: bankrupting many families’ savings in the process. I disagreed with the way that was done and prefer the Liberal plan on income trusts, but Harper did provide justifications for why he changed his mind and Stephane Dion has provided justifications for why he changed his. For Conservatives to accept one and reject the other is patently dishonest. People aren’t rigid automatons embedded with same beliefs for decades, Stephane Dion has observed what’s happened in Europe (where they have been problems getting a formal cap-and-trade system up and running and where some countries have had demonstrated successes with carbon taxes) and had lengthy discussions with his caucus on the best environmental and economic plan to put forward. Many politicians have also changed their minds on same-sex marriage in recent years, people can change their opinions and as long as they can justify the change of heart we should be fine with that especially if they have come around to the adopting the best approach (like allowing same-sex marriage and combating climate change with a Green Shift).

The reality is many small c-Conservatives and economists back this plan and deep down probably many members of the Conservative Party know it is the best approach as well. In opposing the Green Shift and calling it “insane” and “crazy” Conservatives have abandoned their principles in favour of pandering for votes based on a disinformation and fear campaign. When you have NO worthwhile plan (not a single independent group thinks it will come close to meaningfully decreasing greenhouse gas emissions) of your own I guess there’s little else you can do though.

The NDP Arguments

The NDP response I saw today from Tom Mulclair was just to say that you had to pick between cap-and-trade and carbon taxes and you couldn’t do both, that they can’t be complementary. Somewhat surprising to hear from a former Quebec minister of the environment since Quebec IS doing both, as is B.C. Not to mention that Kyoto is global cap-and-trade and many countries with carbon taxes participate in it. The NDP I think has many members who would favour a Green Shift in combination with cap-and-trade like the Liberals do, but Jack Layton has thrown down the anchor and therefore they have to make due with what they have. They claimed the Liberal plan would harm the most vulnerable and that’s clearly NOT the case. Now the NDP is left opposing a plan that goes to some length in combating climate change and does so in a very fair and equitable way. The Liberals have also made a clear commitment to both cap and trade and a Green Shift. Environmentalists are lining up to say the Liberals have the better plan and I think the NDP is just at a loss right now for what to do (I note that as of now they have no response to the plan on their website). As a party that seems to like using Conservative talking points against the Liberals I’m sure disinformation will be their ultimate chosen approach as well.

The Outside Sceptics’ Arguments

Now I know there are some people that are mostly supportive of this plan, but have some reservations. I think again that it is impossible to have a perfect policy, and any meaningful environmental policy will have some costs passed on to the consumer, but I think this has the best balance. If you stuck to the rigid idea that “revenue-neutral” must mean that all amounts raised must be literally returned through income and corporate tax cuts proper then you would be clearly creating a situation where those with low or fixed incomes, live in rural or northern areas or have more children in the home would be clearly disadvantaged by a carbon tax relative to other Canadians. Liberals believe in balancing social justice with the economy and the environment and this plan does that with the tax credits component and it is still giving the money back to taxpayers as promised. So this plan has very substantial personal and income tax cuts proper but it definitely needed more than that and I’m glad to see it does.

Each of the tax credits such as those for seniors, low-income Canadians, families and rural and northern Canadians ensures that there will be a level playing field so that if those individuals are just as environmentally friendly as other Canadians they will save just as much money. There will be no “grannies freezing in the dark” as some people liked to claim under this plan the most vulnerable are CLEARLY protected against losing money under this plan as they should be. The plan is also well designed to minimize any administrative costs as carbon is taxed at the wholesale level and rather than creating many new tax credits as Stephen Harper has done (which adds more administrative costs), the plan mostly enhances those tax credits that already exist.

We also need to protect our industries so having a carbon tariff would be important in ensuring we don’t face unfair trade conditions. France President Sarkozy proposed taxing countries that didn’t meet their Kyoto targets and I believe the WTO allows for you to impose duties when you can demonstrate you face an unfair trade environment so I don’t believe is something completely novel being talked about here.

Finally it is very important that we be creating extra incentives for individuals to green their homes and invest in green technologies because if Canadians did this on a large scale then we would see dramatic reductions in energy consumption and those same Canadians will save even more money as an added bonus. Liberals will be doing this as well.

The reality is that to leave out all these kinds of incentives and tax credits would be creating a flawed and unfair plan that would go against what Liberals stand for.

So this plan does as it should: encourage environmentally friendly behaviour and investment while re-structuring our tax system in a way that will make us more competitive in the global market. It also commits to returning all the money raised back to taxpayers and ensures most Canadians will reap large savings as a result.

With the Green Shift Dion has finally unveiled the perfect mesh of his three pillars of social justice, economic prosperity and social justice and I am very glad to see this come to fruition.

Now the real campaign begins: getting past the spin and lies of the other parties and vested interests against this and communicating to Canadians why this is the plan we need, why it is fair, how it gets the job done and how the Liberals are the only party that is serious about taking on the challenges we face ahead of us.

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ted said...

Hi Danielle,

I would add that Mr. Mulcair's characterization of the Green Shift as, "a train wreck of programs and numbers that would require a new bureaucracy to administer", is astonishing, coming from him. His party advocates a cap and trade system which, by its nature, would require much more in resources to regulate and preparation time to set up. That is one of the reasons Stephane decided to go with a carbon tax to start off with, leaving the possibility of a cap and trade system for later. A carbon tax can be implemented much more quickly using the existing revenue infrastructure, than a cap and trade system.
For my take on the NDP position, see
this post.