The Globe and Mail

The centrepiece policy - if you can call if that - of the Harper campaign is being released today. CTV is reporting that Harper is going to cut the four cent excise sales tax on diesel gas in half. You heard me right, the much reviled, much discussed four cent diesel excise sales tax is being buried, never to be seen again. Except for the other half.

As of this morning in Toronto, there is an 11 cent spread between the cheapest gas station for diesel and the most expensive. In other words, if you are willing to drive from Kennedy Rd in Mississauaga to the Queensway in Toronto (about a 15-minute drive in light traffic), you can save 550% of the excise tax already. But no matter.

Of course, since most voters don't use diesel EVER, the policy frame isn't about diesel, it's about saving money on groceries.

So let's follow the logical bouncing ball as I go to buy a loaf of bread under my new, cheaper nirvana that Papa Harper is creating for us:

1.) The four cent federal diesel excise tax is about 3% of the current cost of a litre of diesel (4 cents out of $1.25). So cutting it in half will lower the price of a litre of diesel by 1.5%. Truckers of Canada - prepare for early retirement.

2.) But wait, the oil companies and retailers of course could decide to raise their prices by that same 1.5% to fill the "gap" that was just eliminated. Given that diesel prices have routinely changed by more than 5% per day this summer, it is hard to imagine them not doing so.

3.) But maybe they will be impressed by the PM's sweater vests and will keep their prices 1.5% lower - I'm not quite at the Loblaws checkout line yet.

4.) Diesel fuel is ultimately only a small percentage of the overall cost of my loaf of bread. Wheat, flour, oil for production, the retailers margin. amongst many other imputs go into the price of a loaf of bread. But let's say that diesel ends up making up 10% of the total cost of a loaf of bread. My gut is that is probably very high - because the cost of diesel is only a percentage of the total "transportation" cost of the loaf of bread - but for the sake of argument, it works.

5.) A loaf of bread is about $2.50. 10% of that (i.e. the percentage of the cost that is diesel) is 25 cents. 1.5% of that (i.e. my Harper Bonanza) is just over a third of a cent.

6.) And this presumes that the retailers are also impressed by the PM's warm and fuzzy new look and don't decide to raise the price of bread by 1/3 of a cent (which of course is tough to do given how our coins work out....)

So, Stephen Harper's big policy announcement today - the one that will save us all money on everything instead of raising taxes on everything - will save us a penny if we buy something that costs more than $7.50. Otherwise, it's a rounding error that can't be passed on to consumers.

Where do I throw in the white flag? This one's over.

And I won't even get into the environmental arguments against this policy.