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Tuesday, January 13, 2015

Is a carbon tax the latest Ontario tax grab?

Two national newspapers, at least, have carried articles recently alerting us to the likelihood we’ll have a carbon tax imposed in the near future.

According to Adrian Morrow of today’s The Globe and Mail, “The Ontario government is closing in on a plan to put a price on carbon emissions after nearly seven years of delays.” And Terence Corcoran warns us in the Financial Post, “Get ready for the great carbon tax grab.”

When I hear terms like “carbon tax” or “pricing carbon” my blood pressure rises to unhealthy levels. It’s not that I disagree entirely with the concept, it’s because I know left-wing politicians would like nothing more than to find a new revenue stream to fund ever more social programs that are well within the responsibility of individuals to fund for themselves.

Many, perhaps most, conservatives like me are not at all against reducing pollution or conservation of national resources. And if a carbon tax helped us reduce pollution and/or to conserve our precious carbon-based resources, I’d welcome it.

Moreover, if I were sure any new carbon tax would be applied on a revenue-neutral basis, I’d be fully accepting. A carbon tax that was applied with across-the-board reductions in other taxes such as GST, income tax, capital gains and business taxes would be very popular with me.

But what’s the chance of that happening, especially with a Liberal government in office?

I’m sure you readers remember Stéphane Dion’s 2008 “Green Shift” scheme. Dion assured Canadians the tax would be revenue-neutral, telling us:

The Liberal Green Shift will cut taxes on those things we all want more of—such as income, investment and innovation—and shift those taxes to what we all want less of: pollution, greenhouse gas emissions and waste.”

But, when Canadians checked the fine print they found that Dion was also promising to use the new revenue to fund (a) a new universal child tax benefit worth $350 per child annually; and (b) to add a $600 increase to the Guaranteed Income Supplement for seniors, and increase benefits for low-income Canadian families.

In other words, when all was said and done, the Green Shift was just another tax grab to use to buy votes for the Liberal Party and was not at all revenue-neutral.

Dion was cute though. By his definition, Green Shift was revenue-neutral since in his words, the plan “will put every single penny back into the hands of Canadians.” Every tax, of course, goes back in some way or the other into the economy. But most reasonable people would agree than revenue neutrality implies that one tax is added/increased and another is rescinded/reduced. Dion’s plan involved a significant redistribution of wealth, not revenue-neutrality.

This time around, the threat is coming from another Liberal party, that is, Kathleen Wynne’s Ontario Grits. Does anyone believe a Wynne government—a tax-and-spend-and-forget-about-deficits government of the first rank—would care about revenue neutrality?

The Ontario premier and her environment minister, Glen Murray, and finance minister, Charles Sousa, must all be salivating at the drop in crude oil prices that will help ease in their new carbon pricing scheme, whatever that may turn out to be.

I think most of us know the Government of Ontario won’t make a new carbon tax revenue-neutral—they are convinced they can’t afford to do so. (I disagree, of course, since I believe the province already has enough money to balance its books.)

The Ontario Grits have spent a decade on a wasteful spending spree, not to mention its several scandals costing billions of dollars. I believe that not only will Wynne add a carbon tax, it’ll be added on top of the HST (another shameful tax grab, by the way), already onerous gasoline taxes and the unnecessarily expensive costs of electricity and related green energy projects.

The Wynne government has already proven it cannot be trusted with our money; it’s time for us to raise hell when she asks for more. Those Liberals at Queen’s Park are addicted to spending and need our help to kick the habit.

3 comments — This is a moderated blog and comments will appear when approved. Please don’t resubmit if your comment doesn’t appear immediately, and please do not post material that is obscene, harassing, defamatory, or otherwise objectionable.

  1. It is instructive to look at the words of Chris Ragan, Chair of Preston Manning's Ecofiscal Commission, which is advocating for a price on greenhouse gas emissions. In an interview, Mr. Ragan had this to say, "The way we describe ecofiscal policies in our report, there are two halves to it. The first half is: you price pollution into the fiscal system, whether we’re talking about air pollution, or water pollution, or carbon, or driving on congested roads. And as soon as you attach a price to pollution, people have an incentive to avoid it. This really is Economics 101. So there are two effects from the pricing of pollution: Number one, people pollute less, when there’s now a price attached to their garburator; and number two, they have an incentive to try to innovate their way around it. So there’s both an environmental benefit and an economic benefit. And then the second part of ecofiscal policies is just as important: You’ve just now generated some revenues from the pricing of pollution, so let’s now take those revenues and recycle them back into the economy. And let’s do that in a very intelligent way. You can use that money to lower corporate taxes, or lower personal income taxes. You can use that money to give back to the most vulnerable, lowest income families. You can use that money to invest in R&D, or clean tech, or public infrastructure."

    So this is really just another attempt at social engineering and government dirigiste economic policies.

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    Replies
    1. Reducing pollution is a good thing; income redistribution can be a good thing; using revenues from the former to accomplish the latter is a bad thing.

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  2. carbon based organisms living on a carbon based planet trying to tax and control carbon. it would be very funny if it was not so stupid.

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