Here comes another liberal tax and this is going to be a big one. It is absolutely not going to save the climate or the environment, but it will line the pockets of the liberals and their friends.
Here comes carbon pricing
The Trudeau government will introduce its national plan this fall … and it’s going to cost us big-time
Climate Change Minister Catherine McKenna said Friday the Trudeau government will present its plan for a uniform, national carbon price this fall, as part of a larger package of climate change initiatives.
“What we want to see is uniformity in terms of a national price,” McKenna said in an interview with Danielle Bochove of Bloomberg TV Canada. “We need a national price on carbon, so that’s what we are going to have … in the fall.”
Translation? Hold on to your wallets.
While Prime Minister Justin Trudeau campaigned on bringing in a national carbon price in last year’s election, he provided few details about when or how it would happen.
We now know it will be in the fall.
And we also know it won’t be revenue neutral.
That means it will further increase our cost of living, in addition to the carbon pricing schemes provinces like Alberta (carbon tax) and Ontario (cap-and-trade), will be imposing next year.
We know this from McKenna’s following statement to Bloomberg.
“Provinces and territories need to decide what they’re going to do with the revenues and there’s different models, (for example) revenue neutral model, where you make investments so you can foster innovation …”
Except that’s not what revenue neutral means.
McKenna is either making the same mistake Alberta Premier Rachel Notley did when she introduced her carbon tax last year, or she’s being disingenuous.
A revenue neutral carbon pricing system — only British Columbia’s comes close — means that when the government imposes higher taxes or consumer prices on its citizens through carbon pricing, it lowers other taxes by an equal amount, so the government’s net revenue remains the same.
Notley and McKenna apparently think revenue neutral means the government spends all of the money it gets from carbon pricing on whatever it deems are green initiatives, such as building public transit. That’s nonsense.
In fact, without revenue neutrality, carbon pricing schemes become just another punitive cash grab by governments, without effectively or efficiently lowering emissions.
That’s because they only lower them, if at all, by making people poorer, because they now have less disposable income to buy the goods and services created using fossil fuel energy.
By contrast, in a revenue neutral carbon pricing system — called carbon fee and dividend — the government returns to the public either through direct grants or income tax cuts, all the money it raises from carbon pricing.
This doesn’t mean everyone’s income stays the same, but it creates a virtuous circle in which (a) people are insulated from the higher cost of living caused by carbon pricing through income tax cuts or grants and (b) they have the choice to lower their expenses, thus increasing their income, by choosing products and services with lower carbon footprints.
This eliminates the need for massive government bureaucracies to administer cap-and-trade, or to pay big industrial emitters billions of public dollars either through direct subsidies (carbon taxes), or free carbon credits (cap-and-trade).
That’s because a carbon fee and dividend system creates a real economic incentive for businesses to lower their emissions, without subsidies or credits, by creating a market demand among consumers for products and services with lower — and thus less expensive — carbon footprints.
Businesses thus have a genuine incentive to reduce their emissions through innovation — higher profits and greater market share — rather than a multi-billion-dollar subsidy program which encourages them not to lower emissions.
Canada’s carbon pricing plan is apparently going to be as far away from that ideal as you can get.
A hint was the enthusiasm McKenna expressed about how major financial institutions support the government’s plan.
Of course they do — they’re going to make a fortune trading carbon credits — just as major industrial emitters who also support carbon pricing are going to make billions of dollars in subsidies our governments are throwing at them in return for their support.
Indeed, at the same Toronto Board of Trade event where McKenna spoke, Bank of England Governor Mark Carney predicted global carbon pricing will create a $5 to $7 trillion-a-year business in so-called clean infrastructure projects, much of it financed through capital markets.
Terrific. Except Europe’s 11-year-old cap-and-trade market, the Emissions Trading Scheme, is overrun with carbon credit fraud and the company that was the biggest and earliest supporter of carbon trading in North America was Enron. Ring any bells?
BY LORRIE GOLDSTEIN, TORONTO SUN
FIRST POSTED: SATURDAY, JULY 16, 2016