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Dion proposes Carbon Tax

billonlogan

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John Turley-Ewart: Is Liberal MP Mark Holland a secret Tory agent?

Posted: May 02, 2008, by John Turley-Ewart
National Post

Whose interests Mr. Holland serves is a question many in Liberal ranks must be asking themselves this morning after the Liberal MP made it known that Stéphane Dion "will be championing a bold idea — tax shifting — that will encourage industry and individuals to make green choices." This "bold idea" essentially means Mr. Dion wants to make buying fuel more expensive than it already is by imposing even more taxes on it. Now there is a campaign issue for the Liberals that would make Stephen Harper and the Conservatives a bunch of happy campers – especially if its is modeled after the BC carbon tax plan that will take effect this July.

In B.C., consumers will see a new tax applied to gas, diesel, home heating fuel, coal, propane and natural gas. The tax will be applied gradually until 2012 and will see 2.7 cents tacked onto a litre of home heating oil this year. By 2012 that amount will reach 8.2 cents. For drivers, which comprises the majority of workers in this country, they will see a new gas tax of 2.4 cents per litre this year that will grow to 7.24 cents by 2012.

B.C.'s government is looking at an additional $1.8-billion for its coffers, money it says will be given back to the good people of that province in the form of cash and tax credits. But those who will benefit will be DINKS (dual income, no kids) living in condos who walk or talk public transit to work. Those who will subsidize their lifestyle with an increased cost of living will be suburban families dependent on cars to get them to and from work, daycare, school and the shopping mall.

Keep in mind as well that Canadians already pay outrageous amounts of tax on fuel at the pumps, imposed by both provinces and Ottawa. In Ontario, for example, only 47% of the provincial tax will find its way into road improvements that reduce congestion. For a breakdown of just how much tax is imposed by both the federal and provincial governments on a litre of fuel, read this.


To apply the B.C. carbon tax model across Canada, as Mr. Holland says his leader may be considering, would give the growing suburban belts around urban areas in Ontario and Quebec one more reason to vote for Mr. Harper's Conservatives who have built their brand on being family friendly. And it is those suburban belts that Mr. Harper, especially in central Canada, needs to make a breakthrough in order to win a majority government.

Mr. Dion running on a platform that would make life more costly for people in suburbs is a dream the Conservatives would love to realize.

Mr. Holland — who you will recall is the fellow who suggested the Liberals would take control of Alberta's oil sands and cut production if elected — undoubtedly presents himself as an eager Liberal MP. But he has a knack for jumping up at just the right time and embarrassing the Liberals.

The Conservatives could hardly ask for a better friend.
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He did win the Liberal leadership on his environment platform, so this should be no surprise. If he's going down, then so be it on a carbon tax proposal.

Are Canadians willing to pay a carbon tax, like the B.C. proposal?
 
I would like to see this be close to revenue-neutral; ie reduce personal and corporate income tax by an equal amount to that raised by the carbon tax. Very sensible small-l liberal idea.
 
This "bold idea" essentially means Mr. Dion wants to make buying fuel more expensive than it already is by imposing even more taxes on it.

Gee, how brilliant is this? Liberal Party platform: make energy more expensive! What a plan!

Radical!!

The carbon tax is a sales tax by any other name. The new, sexy obsession with carbon (and this should actually be carbon dioxide - but whatever) will serve as a means to making people feel they are doing something positive by paying more taxes on energy. Regardless, the proceeds will go into general revenue and will probably not be aimed at solving any actual (or perceived) problems. And as for being revenue neutral, many governments secretly wish for more revenue that can be accumulated in ways that don't bother taxpayers too much, and can fund whatever pet project they have in mind.
 
Dion just gave the Conservatives more votes from the 'till now undecided. We already pay huge taxes on fuel, and now he wants to raise taxes again?

How about Dion campaign on what really bothers Canadians, such as health care, high taxation, shaky manufacturing economy, etc.
 
A carbon tax actually makes all kinds of sense. But, don't take my word for it; see what economists have to say on the subject. We do not pay outrageous fuel taxes by world standards. A carbon tax will allow corporate and capital taxes to be reduced, taxes which cause far more harm than proportional taxes on fuel.

If you don't like paying fuel taxes, avoid it! Use less fuel by buying a more efficient car, driving more intelligently, not buying the 3000 sqft house in Milton, insulate those drafty windows, etc. Wasting energy is not a 'good' and should be discouraged. Corporate and personal income are 'good', and should be encouraged. Tax the former, and not the latter...
 
The carbon tax is a fuel tax and nothing more. The linking of the word "carbon" to a fuel tax is an attempt to transmit an idea that something is being done with respect to worries over carbon dioxide. The fact of the matter is that the money will end up in general revenue and not be applied to anything that is directly geared to alleviating the alleged problems caused by carbon dioxide. So linking the word "carbon" to this tax serves only as a means to making the tax palatable in the minds of taxpayers who are expected to believe that paying more for fuel is doing something positive for the environment.

The price of fuel has an effect on virtually every other aspects of the economy, from factory production to construction to food, so a tax increase on fuel cannot be avoided. To offset reductions in other forms of taxation, taxes on fuel would have to be raised considerably, so don't expect plunging corporate and capital taxes when this fuel tax is introduced.
 
A carbon tax actually makes all kinds of sense.
A true "carbon" tax should be applied to all activities that generate, well...carbon. First and foremost, having children, thus creating future consumers of energy is a definite carbon tax target. Every parent should have to pay a % of the babies likely lifespan and environmental impact in $$ upon issuance of the birth certificate.

Oh, and I am avoiding higher fuel taxes by ensuring that parties that try to implement them are not elected. With the exception of parts of Europe and Japan, we pay higher fuel taxes, and much higher fuel taxes than our American neighbours.
 
Here it is straight from the horses mouth. I worry when politicians talk about creating new taxes to solve complex issues. I worry more when it comes from Stephane Dion and the Liberal Party.


To fight climate change, 'we need to put a price on carbon'

With its wealth, Canada can and should lead the world in battling effects of climate change

May 04, 2008
Stéphane Dion

Now, more than ever, we must build bridges. We must build bridges between environmental sustainability, social justice and economic growth because only a solution that addresses all of these concerns will ensure success. And we must build bridges among the countries of the world because climate change is a global crisis requiring global action.

I believe the countries with the strongest economic fundamentals and the most inclusive approach to social issues will be in the best position to find solutions to the climate-change crisis.

Canada is one of those countries – with some of the best educated, most ingenious, most industrious people on Earth. We have access to the best tools. We have top-notch research and education. We're rich – one of the richest nations on Earth. As such, we also bear a tremendous responsibility to tackle this challenge as well as the challenges of air and water pollution, species depletion and environmental toxins. But most importantly, if we take on this responsibility as a country, if we turn these challenges into opportunities, we stand to become a leader of the coming green revolution.

The private sector is beginning to recognize and seize these opportunities as well. The first movers of today – who understand that green technology and energy efficiency are the way of the future – will be the leaders of tomorrow's economy.

According to Goldman Sachs, the amount of international capital to be invested in environmental technologies and clean energy has skyrocketed from $400 billion in 2003 to $3 trillion in 2006 – more than a seven fold increase in just three years. Those numbers are only going to grow and Canada stands to lose out if more isn't done to earn our share.

But the economic effects won't come just from productivity or trading opportunities for our companies if we act now, but also from the competitive threats if we do not.

The three presidential candidates hoping to replace U.S. President George W. Bush are all proponents of decisive efforts to reduce greenhouse gas emissions. Congress is looking at cap-and-trade systems that will put a serious price on carbon. Our biggest trading partner is moving toward a greener future and we need to be there, too.

I think I know how Canadians want to answer the challenge of the green revolution: The Canadian people want to do more. Over the past year, the environment has consistently ranked as the number one issue for Canadians. You can see this eagerness at the grocery store, where more people bring reusable bags with them to shop. You can see it on our roads, where more hybrid cars are showing up. And you can hear it in conversations in our schools and offices, coffee shops and public places. Ideas like carbon offsets and footprints no longer seem strange.

Many provincial governments are leading the charge by implementing comprehensive climate-change policies. Some have ambitious targets in line with our Kyoto commitments. Some are bringing in new regulations for buildings and transportation. Some have started to put a price on carbon, either through cap-and-trade systems to limit industry emissions or through carbon taxes.

Economists increasingly point to the benefits of taxing things we want less of – like pollution – while lowering taxes on things that we want more of – like productivity and income. Noted economists Jack Mintz and Nancy Olewiler recently proposed converting the existing tax on vehicle fuels into a broader, environmentally based fuel tax, and using the revenues to reduce other taxes. They said this could contribute to both a better environment and a better economy. This kind of thinking deserves careful consideration.

We can talk about what the best model for putting a price on carbon across Canada might be, but the fact is we need to just do it.

I am struck by the contrast between the climate-change debate today and the one we had in this country only a few short years ago.

When I was environment minister and listed greenhouse gases as toxic substances under Canada's Environmental Protection Act, the Conservative opposition questioned the very existence of climate change and claimed any regulation would destroy our economy. They even said, "Carbon dioxide is in babies' breath – how can you call babies' breath toxic?" They just don't get it.

Under the current Conservative government – a government that as late as 2006 was talking about "so-called greenhouse gases" – Canada is not doing enough to tackle these challenges. The Prime Minister is trying to revive the old way of thinking that says you cannot have a strong economy and a clean environment.

We need to put a price on carbon. We need to make the costs of damaging our environment immediately visible and let polluters know they can't continue to dump pollution into our atmosphere for free. The price of carbon pollution must increase over time to encourage industry to change its behaviour and make greener choices so it can thrive in the 21st century.

We need to significantly increase our green, renewable power generation. And to this end, we have announced incentives to encourage the development of clean energy sources such as wind and solar, so by 2015 these sources will account for at least 10 per cent of Canada's total electricity output.

We see that every commitment we make needs to have a green aspect to it, whether it's supporting our manufacturing sector – helping it to use and produce green technology and products – or overhauling our national and urban infrastructure – ensuring we invest first and foremost in environmentally sustainable designs that will help us both fight and adapt to climate change.

Finally, we need to play a bigger role in the international efforts to solve the climate-change crisis. We need to participate in the setting of international goals to reduce greenhouse gas emissions and international rules to put a price on the cost of inaction. We cannot ignore the science of climate change simply because we don't like what it forecasts. We need to work together to bring together the environment, the economy and social justice so we can lead the way toward a sustainable future.

We Liberals have a vision of a richer, greener, fairer country for all Canadians – for ourselves, our children and the generations to come. It is the vision I asked my party to support when I ran for the leadership of the Liberal Party of Canada, and it is the vision we Liberals will ask Canadians to help us realize when the next election comes.

Every decision we will make as a government will have this objective at its core. Every cabinet minister will have it as her or his mandate, from our minister of industry to our minister of foreign affairs. For we Liberals know that we must build the bridge to the future together and we need the three pillars of economic prosperity, social justice and environmental sustainability to make it strong.

This article is drawn from the May 2008 issue of Policy Options, the magazine published by the Institute for Research on Public Policy. Stéphane Dion is the leader of the Liberal Party of Canada.
 
A true "carbon" tax should be applied to all activities that generate, well...carbon. First and foremost, having children, thus creating future consumers of energy is a definite carbon tax target. Every parent should have to pay a % of the babies likely lifespan and environmental impact in $$ upon issuance of the birth certificate.

That's silly. Children will also likely speed as drivers, so we should start every one off with 10 speeding tickets, right? You don't tax children because children are not inherently drivers of carbon emissions. Total strawman--I'm disappointed because this is not intellectually honest.

Oh, and I am avoiding higher fuel taxes by ensuring that parties that try to implement them are not elected. With the exception of parts of Europe and Japan, we pay higher fuel taxes, and much higher fuel taxes than our American neighbours.

You mean you don't want to exclude more than the half of the developed world you already have? So, in the developed world excluding everyone but the US, we pay the highest fuel taxes. Talk about spin. What about Australia? Their petrol tax, at 38 AUD cents per litre, is higher than ours as well.

US average fuel tax is 12.5 USD cents per litre. (source) We are closer to US rates by far than GB rates (over $2 CAD per litre).

Ergo, we DO NOT pay exorbitant fuel taxes, as you allege.
 
The carbon tax is a fuel tax and nothing more. The linking of the word "carbon" to a fuel tax is an attempt to transmit an idea that something is being done with respect to worries over carbon dioxide.

Not really true. Biofuel will be exempt, as will plug-in hybrid/pure electric vehicles at the point of charging (coal generation will be taxed). If carbon capture and sequestration is cheaper, then the tax can be avoided that way. Biomass heating systems will also be exempt. It's not just a straight fuel tax. It may seem that way due to the dominance of petroleum.

The fact of the matter is that the money will end up in general revenue and not be applied to anything that is directly geared to alleviating the alleged problems caused by carbon dioxide.

No, it'll end up back in the pockets of Canadian individuals and businesses. They can choose whether to use that money to pay the carbon tax, or on things that add value. This is the idea of the tax shift.

So linking the word "carbon" to this tax serves only as a means to making the tax palatable in the minds of taxpayers who are expected to believe that paying more for fuel is doing something positive for the environment.

It will; all else equal, consumption will be reduced and their income taxes will be lower.

The price of fuel has an effect on virtually every other aspects of the economy, from factory production to construction to food, so a tax increase on fuel cannot be avoided.

It is possible to accomplish the same tasks with less fuel. Walmart knows this, and has retrofitted their US fleet to use substantially less diesel. This is how businesses will be able to avoid the tax: become more efficient in energy use, or use alternative sources of energy.

To offset reductions in other forms of taxation, taxes on fuel would have to be raised considerably, so don't expect plunging corporate and capital taxes when this fuel tax is introduced.

You mean, by the exact same amount in absolute terms? Every billion paid in carbon tax means a billion less in income tax. You're just trying to distort the picture... the money won't just vanish.
 
Are we talking about a new fuel tax, or a carbon tax. If any activity that generates carbon dioxide is to be charged the new carbon tax, then this must include anything made of plastics, almost everything imported since the transportation to get it here would be very carbon rich, etc.
 
Sure... if there are GHG emitted through an activity that wouldn't otherwise be in the atmosphere, the tax should be applied to it. And most carbon tax proposals suggest import duties based on some assumption of how much CO2 was emitted in the production of those goods.
 
Not really true. Biofuel will be exempt, as will plug-in hybrid/pure electric vehicles at the point of charging (coal generation will be taxed). If carbon capture and sequestration is cheaper, then the tax can be avoided that way. Biomass heating systems will also be exempt. It's not just a straight fuel tax. It may seem that way due to the dominance of petroleum.

Biofuels produce infrared absorbing gases, just not as much as the combustion of petroleum. Natural gas also produces less than the combustion of petroleum, but it will be taxed according to Dion. Biofuels will demand more land use, and both carbon dioxide and methane are emitted during the crop production cycle. The carbon tax is a fuel tax regardless of its selective application.

No, it'll end up back in the pockets of Canadian individuals and businesses. They can choose whether to use that money to pay the carbon tax, or on things that add value. This is the idea of the tax shift.

I wasn't aware that you had the full details of how an unelected party plans to orient this theoretical tax strategy. Businesses and individuals will still pay taxes, and such a proposed tax shift will be at best revenue neutral. This means that either fuel taxes will have to go way up to offset reductions in other forms of taxation, or existing forms of taxation will simply stay in effect. If the goal is to reduce consumption, then you are killing the goose that's supposed to lay the golden egg.

It will; all else equal, consumption will be reduced and their income taxes will be lower.

So the purpose of sales taxes like the GST and the PST are actually aimed at reducing sales at stores? That is roughly what is being suggested by the application of a carbon tax: reduction of consumption.

It is possible to accomplish the same tasks with less fuel. Walmart knows this, and has retrofitted their US fleet to use substantially less diesel. This is how businesses will be able to avoid the tax: become more efficient in energy use, or use alternative sources of energy.

Of course it is possible; I lived through the oil crisis of the early seventies. I've seen massive improvements in fuel efficiency. But it was levels of efficiency that were targeted, not the planned escalation of the price of fuel, and the vague strategy of just expecting others to do something about it. What we have hear is a political party that wants to raise money by taxing fuel and driving up the price of energy so as to generate revenue. Carbon (dioxide) is the fashionable bad boy for taxation, and they plan on using contemporary worries as a means of sliding this one through. All they want to do is to add pressure to the economy to generate a response; they don't actually plan to do anything proactive.

You mean, by the exact same amount in absolute terms? Every billion paid in carbon tax means a billion less in income tax. You're just trying to distort the picture... the money won't just vanish.

I go back to my earlier point; the Liberals actually don't have a plan.

But to note, if the government wants to maintain revenue it will obviously have to maintain an absolute amount of revenue to pay for its functioning and services. In the long run, this means that a tax which is supposed to reduce the consumption of certain fuels is one that will inevitably reduce revenues as the consumption of that fuel drops (the intended effect). So in the end other forms of taxation, if reduced, will have to rise. To that end, there will not be a significant reduction in other forms of taxation.
 

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