A Response to Railway Disasters

by Eric Rempel

Last week  the TV news again showed us dramatic pictures of burning railway oil tank cars, this time near Plaster Rock NB. Just two weeks before that ten tanker cars carrying oil derailed just south of us near Casselton North Dakota. October 19 nineteen derailed tanker cars  burned near Gainford Alberta. And no one needs to be reminded of the derailment and tragic fire in Lac Megantic.

There can be no doubt that we are seeing an increasing number of accidents involving trains carrying oil. Fortunately, of the four fiery derailments that have caught our attention recently, only the Lac Megantic incident resulted in the loss of life and non-railway owned property. Nevertheless given that all of our railways pass through major population centres,  its inevitable that there will be another derailment and fire  again resulting in the serious loss of life and property.

Something needs to be done. The  most frequently proposed remedy to this danger is that we need to construct pipelines. That may be part of the solution, but we need more.

We need to use tax policy more creatively. Currently our country uses taxation to bring revenue into government coffers. We need money to deliver government programs, so we need taxes. How creative is that!? Small wonder that our Prime Minister can go on record (and  receive support) for saying he thinks all taxes are bad.

But let's stop a bit. We now tax tobacco and liquor. Is that tax bad? We argue that the tax is needed to discourage the use of these products. Furthermore, the use of these products increases our societal health bill, so it is only right that the users of these products pay for this additional demand on our health system. So users of tobacco pay for society's cost of lung cancer through the tobacco tax. I think this is not only fair, but also good.

If we accept this “vice tax” as good, surely we can apply that same logic to the transportation of dangerous goods – to the transportation of oil? Clearly the transportation of oil involves substantial risk. If we did not know that before, we know it now. How much are the beneficiaries of that oil [not only the oil companies, but also we, the end users] paying for the incurred risk? Nothing! It may well be that the railways charge more for the transportation of hazardous goods than for non-hazardous goods, but whatever extra fee there is is there to cover the railway's risk, not society's.

Furthermore, we believe that smokers and drinkers contribute to the impoverishment of our society through their behaviour, so we think it fair that they should offset this impoverishment through the tobacco and alcohol tax. But the consumers of our scarce resources, particularly oil, also contribute to the impoverishment of our society, particularly society as our children and grandchildren will find it when these resources are depleted. Where do these consumers pay?

Taxes should do more than merely raise revenue. Progressive taxation will also encourage desirable behaviour and discourage undesirable behaviour.