Category Archives: carbon tax

The Green Shift for beginners

We put together what I think is a pretty good primer on the Liberals’ Green Shift for the Citizen today. Here’s senior writer Don Butler’s main explainer piece, and my analysis of why the Liberals are having such trouble with their sales job.

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Paul Martin’s the best you’ve got?

When we call Joe Clark, John Turner, Kim Campbell and Paul Martin “former prime ministers,” it is technically true. But, I mean, come on…

Four former prime ministers – Kim Campbell, Paul Martin, Joe Clark and John Turner – and leaders in academia, science, business and the environment have united to demand the federal government do much more to deal with climate change.

The diverse group, which also includes students, steelworkers and authors, is expected to release a statement in Toronto Tuesday calling for “steep cuts” in Canadian greenhouse gas emissions and deployment of “climate-safe technologies at a staggering rate.”

While the group claims to be non-partisan, it is clearly dissatisfied with the Conservative government’s performance on what many consider the most pressing issue facing the planet.

These were really, really, really bad prime ministers. Only Martin actually won an election and that was another technicality — he really just sort of notched an election along the Liberals’ long decline. In fact, the secondary members of the group

Stephen Bronfman, the Hon. David Peterson, Prof. David Keith, Katherine Giroux-Bougard, National Chairperson, Canadian Federation of Students, Prof. Andrew Weaver from the IPCC and the University of Victoria, Ken Neumann, National Director for Canada, United Steelworkers, Kashmere Dahliwal, President of North America’s largest Sihk temple and Dr. Marlo Raynolds from the Pembina Institute

— while a somewhat random collection of luminaries, probably collectively shine brighter than the most embarrassing living losers in Canadian politics.

Which is a shame, because the group’s signature policy recommendation, that some sort of policy be adopted that prices carbon at not less than $30 a tonne, ought to be taken seriously in the public debate.

Canadians support a carbon tax … for British Columbians

Hard to make sweeping conclusions based on a poll asking Canadians at large about one province’s policy for its own people, but I’ll go as far as calling this encouraging:

When told that the government of British Columbia had recently introduced “a carbon tax on fossil fuels to reduce greenhouse gas emissions,” 72 per cent of those surveyed in the poll said that this was a positive step versus 23 per cent who thought that it was a negative step. The poll surveyed 1,009 Canadian adults across the country between April 29 and May 9, 2008 and is considered accurate within 3.1 percentage points, 19 times out of 20.

Jason Doud, a research analyst at McAllister, said he’s not surprised at the results since his firm’s recent polls have consistently revealed that Canadians are more concerned about the environment than other issues.

“The support for B.C.’s carbon tax is fairly uniform across Canada,” he said. “Six out of 10 people definitely support it when you look at the numbers.”

The thing about Liberals is that they act like Liberals

Rightish Green activist and sometime candidate John Ogilvie isn’t thrilled by the federal Liberals’ insistence on combining a carbon tax with wealth redistribution:

Personally, I’m pissed that Dion is mashing together a carbon tax shift AND an assortment of anti-poverty, child-tax-credit initiatives. It’s not that I’m against these income-redistribution initiatives, but I am smart enough as a citizen to consider the carbon tax shift and the income-redistribution projects SEPARATELY.

By failing to make the tax shift truly neutral for all taxpayers, Dion has prevented us from making a good clean case for the Green tax shift.

True. Though in fairness, even green Liberals aren’t Greens. Stéphane Dion is up-front about the idea that his party should stand for three principles — economic prosperity, social justice and environmental consciousness — and it’s a trademark of the party that the three all kind of get munged up together in many policies, so it’s hard to tell what the point of any particular measure is. No reason why a carbon tax should be any different.

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.

Dion takes the field at last

Notice

For Immediate Release
June 18, 2008

Liberal Leader Stéphane Dion Announces the Liberal Green Shift

Date: Thursday, June 19, 2008
Time: 10:00 AM
Location: House of Commons, Railway Room, 253-D Centre Block, Ottawa, Ontario

Please note that all details are subject to change. All times are local.

– 30 –

Contact :

Press Office
Office of the Leader of the Opposition
613-995-5904

Untie your own hands, Mr. Dion

A tear-your-hair-out point-counterpoint in today’s National Post pits Liberal leader Stéphane Dion against Environment Minister John Baird, debating the merits of a carbon tax and green tax-shifting.

Dion, mind you, is at a disadvantage. He doesn’t have any of the specifics of the plan he’s arguing for, even though it is, in fact, his plan. He’s stuck with generalities, in a field where the devil is always in the details. He says things like this:

The Liberal tax shifting plan is as powerful as it is simple. We will cut taxes on those things we all want more of — income, savings, investment and innovation. And we will shift those taxes to what we all want less of — pollution, greenhouse gas emissions and waste. We need to make polluters pay and put every single penny back in the hands of Canadians through the right tax cuts.

Which is pretty unequivocal, but because the details aren’t there, his debating opponent, Baird, can fight against a straw-man version of the plan, like so:

Can a carbon tax ever be truly revenue neutral? If government is collecting $1 in taxes, and “tax-shifts” that one dollar towards spending 50¢ on green programs and fifty cents on programs like health care and infrastructure, how does the government make up that lost revenue on health care and infrastructure? By raising taxes, of course.

That’s a hypothetical that Dion has denied himself the tools to counter. In so doing, he might well end up burying a plan that has broad support from everyone from David Suzuki to the Canadian Council of Chief Executives.