The “Green shift”

Enfin, the federal Liberals have taken the curtains off their green tax-shifting policy (PDF). It might not be too late to recover from the months they’ve spent defending a thing they wouldn’t tell anybody about against attacks that couldn’t definitively be said to be absurd, given that the thing being attacked was a near-cipher.

But now the real thing is out there, and it seems to me it’s more or less as billed: a tax on high-emission fossil fuels that’s high enough to make a difference (eventually working out to $40 a tonne of carbon dioxide), if not as high as tough environmentalists might like ($50 a tonne is generally the low end of credible estimates of what a carbon tax should be, and they go as high as $150 a tonne), counterbalanced by cuts to personal and corporate income taxes and enhancements to programs that send money to people at the bottom of the economic scale who pay few taxes or none at all.

As the CBC reports:

The plan offers the following personal income tax cuts in compensation as people pay more for heating costs, food and other items:

  • A 1.5 percentage point rate reduction for the lowest tax bracket (the first $37,885 of taxable income), to 13.5 per cent from 15.
  • A one percentage point rate reduction for the second-lowest tax bracket ($37,885-$75,769), to 21 per cent from 22.
  • A one percentage point rate reduction for the bracket between $75,769 and $123,184, to 25 per cent from 26.

Dion also unveiled a number of tax credits he said would help out families. He said that the plan, by the fourth year, would include a new refundable child tax credit worth $350 per child per year.

The Liberals would also introduce a new guaranteed family supplement that would provide $1,225 to low-income families with children under 18.

As well, the plan would include a green credit worth $150 every year for every rural tax taxpayer, beginning in the first year of the plan.

I’m not going to pretend I think it’s a great plan, so filled with politically necessary exceptions and loopholes is it. The extra rebate for people living in rural or far-North areas, for instance, is pure pandering, and so’s the decision not to add more taxes to gasoline. Yes, it’s already heavily taxed, but not for this reason. If we’re levying green taxes, gas shouldn’t get a pass because we’re already taxing it to pay for roads and so on.

The collection of ways the Liberals’ plan sends money to the poor is fiddly and smacks of opportunism: funding favourite programs rather than finding the most efficient and simplest ways to get money back to people.

So it’s flawed. Maybe because it can’t be perfect and still stand any chance in hell, but all the same: flawed.

Rather than taking it on on those grounds, though, the opposition (including the government, though in the case of the Tories I’m not the first to say that they seem to like acting as if they were still on the other side of the aisle) is continuing the screamfest as if nothing had changed — as if there weren’t an actual thing on the table to discuss now.

The New Democrats are just blithering. Says CP:

NDP deputy leader Thomas Mulcair said nothing in the plan compels emission reductions. He characterized Dion’s carbon tax as “a fine” on industry for continuing to pump out unlimited increases in greenhouse gas emissions.

This is technically true but is a meaningful criticism only if you don’t believe that money affects people’s choices. Which, given that we’re talking about the NDP, is indeed the case, though why they’re so worked up about the advantages the rich have over the poor, I’m no longer sure. Also, why they aren’t calling for repeals of fines as presumably meaningless punishments for crimes.

The Conservatives, supposedly the party with policy smarts, are the most disappointing. Says Canwest:

Prime Minister Stephen Harper led the flood of negative reaction. “They’re so bankrupt intellectually that the only policy idea they can come up with is to impose a new tax on energy prices at a time when energy prices are a national and global problem. That is their only idea?” said Harper during an appearance in Huntsville, Ont.

“Mr. Dion’s policies are crazy. This is crazy economics. It’s crazy environmental policy.”

It is self-evidently not the Liberals’ only idea, but what the heck. Even if it is, it’s supported by a who’s-who of economists and environmental thinkers, left and right alike. Even the American Enterprise Institute supports tax-shifting in principle, and they’re nuts (but in the Tories’ direction, I mean, not the NDP’s). The C.D. Howe Institute, Don Drummond of TD, Tom freaking D’Aquino of the richie-rich CEOs’ association. They’re all on board. This is an idea the Conservatives should have stolen.

But now that they’ve sent Jason Kenney out to dump all over the thing, they’ve definitively boxed themselves in. Never. Policy innovation? Forget it.

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One response to “The “Green shift”

  1. Very fair evaluation. I’m more positive myself, but mainly because, with both the NDP and Conservatives so strong against any carbon tax, I figure the Liberals are going to have to make sure they have a plan that has broad appeal if Canada is ever going to get carbon pricing. The Green Party can include gasoline, but I think the Liberals including gasoline would just guarantee Harper re-election.

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