George Takach a candidate for the leadership of the federal Liberal party, if elected, plans to implement a carbon tax by putting a price on carbon emissions, which many scientists claim are causing, or contributing to, climate change and air pollution. Takach then plans to use the revenue generated to the eliminate Employment Insurance premiums for both employers and employees.
The idea of a carbon tax certainly isn’t new: Quebec, British Columbia and Alberta already have such tax schemes in place. And, apparently, the Government of Ontario has committed to implement a cap-and-trade system as part of the Western Climate Initiative.
One has to be suspicious, however, when such a tax is imposed so that some unrelated social program can be implemented. The danger, of course, is that the carbon tax becomes merely a convenient tax grab—and we do know how Grit governments like to tax. (Think about the unconscionable level of tax Ontarians pay on alcoholic beverages, for example.)
The basis for a carbon tax is, as I understand it, to make sure the social cost of carbon emissions is factored into the price of carbon fuels, thus making them closer in cost to that of renewable fuels, making it easier for consumers to make the change to renewables—or, at least, to switch from high-emission carbon fuels (e.g., coal) to low-emission ones (e.g., natural gas).
Now this makes sense to many Canadians, for they believe human activity is a (or the major) cause of global warming/climate change. And even for some who remain sceptical as to CO2’s contribution to global warming (believing water vapour and sun activity to be more likely culprits), the idea of moving from non-renewable sources of energy to renewable ones is attractive. I’m in this latter category.
I have some bones to pick with Mr. Takach, however.
What’s seldom mentioned when politicians talk about carbon tax is the fact Canadians already pay a very substantial tax on their fuel. In the case of gasoline, for example, we pay a whopping 30+ per cent of the pump price in tax. Add to that the tens of billions of dollars collected by Canadian governments in the form of royalties—a tax by another name. All these taxes are passed on to consumers as part of the prices we pay. But how much of this is used to offset or mitigate the social cost of greenhouse emissions? Not much, apparently, for environmentalists and leftist politicians are always promising to implement carbon taxes—and here I include cap-and-trade schemes.
If there really is a net shortfall in the so-called social cost of using carbon-based fuels, after applying all taxes and royalties directly attributed to carbon-based fuels, I’d sure like to know what it is.
Frankly, I doubt there really is one—a net shortfall that is. My guess is we as a society gain a net surplus from extraction, production/export and use of carbon-based fuels, and new carbon taxes and related schemes are just another tax grab designed to club Canadians into funding a leftist agenda for expanding our government-funded social programs.