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Carbon: tactics, tools and taxes
Alberta’s oil woes bring to mind the old doctors-joke.
“Have you ever had this problem before?”
“Yes I have.”
“Well you have it again.”
The oil executives flailing around to assign blame may wish to consider whether their decisions to ride the commodity wave, rather than invest in value-added processing in Alberta, were such a hot idea.
As well, they could consider whether lobbying the Harper government into neutering environmental regulations to the point of being completely discredited was the right thing to do.
Bob Halliday, Saskatoon
The Ontario government is planning to provide subsidies for emission reductions, instead of a carbon tax (Ontario To Scale Back Climate Targets – Nov. 30).
This will obviously be less effective, since the subsidies won’t be paid to the millions of small emitters, including all of us who drive. But there is another reason this is bad economic policy.
A carbon tax collects revenue and allows other taxes to be reduced. In addition to the benefit of reduced emissions, we can get less distortion of the economy by shrinking the other taxes.
A subsidy requires other taxes to be increased, to get the money to pay the subsidies – raising the economic damage done by distortionary taxes. No economist worth their salt would recommend this policy choice.
Jim Davies, professor, Department of Economics, University of Western Ontario
There are more tools than taxes in a government’s toolbox.
Lead was used in plumbing from the time of the Romans until the mid 20th century. When the neurological effects were understood, governments acted. No, they did not tax lead in plumbing.
Tetraethyl lead was used in gas to retard ignition in the first half of the 20th century with the same effects. Governments acted. No, they did not tax lead in gasoline.
When the cause of Minamata disease was understood, governments acted. No, they did not tax mercury used in the manufacture of acetylene.
When the ecological effects of DDT were understood, governments acted. No, they did not tax organochlorines in insecticides.
When the effects of sulphur dioxide on aquatic and terrestrial ecosystems were understood, governments acted. No, they did not tax sulphur in the production of nickel and electricity.
When the effects of the stratospheric ozone hole were understood, governments acted. No, they did not tax chlorofluorocarbons in deodorant sprays.
Now that the existential effects of greenhouse gases are understood, Ottawa is fixated on carbon taxes. They will not work in a rich country at a level that would let a government hope to get re-elected. When will Ottawa use some of the other tools in its box that have a better chance of getting the job done? To start, let’s tackle one of Canada’s big emitters: coal-fired electricity in Alberta and Saskatchewan. That would require capital resources for grid connections to existing hydro in B.C. and Manitoba, and new green generation.
John G. Hollins, biophysicist, Ottawa
The feds’ criticism of Ontario’s climate change policy may be right, but it sounds a bit like people in glass houses throwing stones.
Ottawa can impose carbon taxes on all Canadians but it chose not to. Instead, it tried to get the provinces to do it, yet still claim the credit for a “national” program. This assumed all provinces would accept Ottawa’s definition of acceptable plans, and that friendly provincial regimes would be re-elected.
Ottawa also assumed that the price of gas would not decline. But at $1 a litre at the pump, Ottawa would need a carbon tax of 25 to 30 cents to raise the price enough to discourage use. If not, the lower price, even with the five-cent carbon tax, will encourage people to burn more gas. Ottawa also assumed the courts will uphold its position, when such decisions can be quite unpredictable.
Perhaps Ottawa should leave the provinces to do what they think makes sense for their different circumstances, and apply its own policies to the whole of Canada where it has a mandate, rather than to individual provinces. The current federal approach is not working; the blame game is about politics, not climate change.
Ed Whitcomb, Ottawa
In light of the Khashoggi affair, here is one way to gauge the morality of Western nations. What if there was no oil in Saudi Arabia? The fury of the West would be firm and swift. By the same token, wouldn’t Canada wield more weight if we had oil? Wait a minute. Canada does have oil! But that is another story.
Jerry Amernic, Toronto
Security, Chicken Little
Re New Zealand Bans Huawei Gear, Following U.S. And Australia (Nov. 29): It would be a bit easier to take the national security threat of Chinese technology seriously if that card hadn’t already been played as a trade tactic for steel and aluminum. Any possibility that the real threat from Huawei is to Apple’s market share?
Perhaps someone could read President Donald Trump the story of Chicken Little at bedtime.
Stuart McRae, Toronto
Re Netflix Canada Gets Another Price Hike (Nov. 30): Surely the federal government cannot continue not applying GST to Netflix and other foreign streaming services. Other than basic groceries, I’m hard pressed to come up with goods and services I consume that aren’t subject to GST. Taxation policies are supposed to be applied fairly and without discrimination across the country, so the federal government needs to get on with being fair and non-discriminatory. It’s not like it doesn’t need the money.
Not to fear, it won’t be called a Netflix tax. It already has a name: It’s called GST and we’ve been paying it since 1991.
John Meldrum, Emerald Park, Sask.
Re Canada’s Vacancy Rate Falls To 2.4 Per Cent As Demand For Rental Housing Still Outpaces Supply (Nov. 28): Regulations could be enacted limiting house-price appreciation to the rate of inflation. Houses would be cheaper and more people could afford to buy, which would reduce the demand for rental accommodation.
Tom Millard, Toronto
What a surprise to see my former house in the Home of the Week feature (Architects Take On Chaplin Estates Challenge – Real Estate, Nov. 30). In the early sixties, my husband and I bought this house on Colin Avenue in Toronto for $17,000. Considering its asking price now of more than $2.6-million, I think we should’ve kept it.
At the time, my husband was a struggling medical student and I was a teacher. As the years went by, we raised three children and two litters of cairn terriers in what was then a three-bedroom house with a pokey basement before we moved on to new horizons.
The architects have done an amazing reno.
Elizabeth Griffiths, Kingston