Mr. Pallister, you Could do so Much Better

By Eric Rempel

The Federal government has proposed a tax which, in five years time, will increase the price of gasoline $0.12. According to gasbuddy, the retail price of gasoline has fluctuated by $0.24 in the past year, $0.38 in the past two years, and $0.55 in the last five years. Given these price fluctuations it’s hard to understand the opposition the Conservatives, provincial and federal have mounted to this tax proposal, suggesting that its going to be economically destructive for Canada.

Just a few weeks ago the Conservatives were painting the proposed tax on carbon as a tax grab – a way of getting more money into the clutches of the government. Now the feds have expanded on their proposed tax plan and have given us more details on the rebate we are all going to get. Now these very same political leaders that were criticizing the plan as a tax grab are now saying that it is a vote buying give-away.

Small wonder that the recent Angus Reid poll revealed that a mere 24% of Manitobans trust the information given by our provincial government when it comes to climate change.

So is it accurate that the federal government, is simply “taking money and giving it back” as Manitoba Premier Brian Pallister has fumed? Of course not. The carbon tax is a sensible, perhaps only way of implementing the “Polluter Pay Principle” -- he who pollutes, is the one who pays for that pollution. In this case CO₂ is being spewed into the atmosphere, and this is resulting in climate change. So she who is doing this spewing, the person burning gasoline, should pay. And through the tax on carbon, she is. But whom should she be paying that to? According to the federal government, the people.

How does this work out? Assume an average Canadian driver, who drives 18,000 km. annually. Do the math yourself, but he will be paying $220.00 annually in carbon taxes on gasoline. By contrast consider another driver who has a 200 km daily commute, and who makes a significant road trip every year, this driver drives 60,000 km annually, and that in a big SUV. He will be paying $900.00 annually in carbon taxes on gasoline. And consider another driver who walks or bikes to work, who plans trips to Winnipeg carefully, and who mostly takes “Staycations”. This driver may drive as little as 5,000 km annually, and may pay as little as $50 annually in carbon taxes on his gasoline purchases. But all three drivers will get the same rebate: in 1922, year five of the plan, $797. I am limiting this discussion to gasoline, but energy used for home heating and transporting food will be affected in a similar way.

Is this a perfect plan? I don’t think so. With good, enlightened criticism, it could be improved. But not by bashing the plan and offering no alternative. For example, the plan comes with many regulations and exemptions. This will make it cumbersome and costly to administer. In my view this was not necessary. A straightforward tax applied at the well head would be simpler and more efficient administratively. Rebates to vulnerable industries or people could have helped them cope. Furthermore, the tax is very timid, and is unlikely to result in much behavioural change.

So there is ample room for the opposition parties to criticize the plan. Such criticism could have resulted in a better plan. At this point there is no alternative to the carbon tax on the table. Mr. Pallister, Mr. Scheer, we need your constructive opposition. We don’t need what we are getting.