Carbon tax and oil subsidies: why such contradictory policies?

[Machjo]

https://www.cbc.ca/news/politics/energy-sector-package-sohi-1.4950619

 

The government wants a carbon tax to deter oil consumption. Logically, the goal is to deter fuel consumption and logically, this should reduce car sales and fuel consumption.

No problem there so far if a government can accept that that's the whole point of a carbon tax and so adapts accordingly (such as by lowering other taxes to encourage economic development elsewhere or provides skills training for workers affected by these declines.

Unfortunately, and perhaps shockingly, it appears that those who promoted the carbon tax have been taken by surprise by declines in the auto and fuel industries even though that was the whole point of it!!!! So now they're proposing bailing out the auto and fuel industries, which of course would totally undermine the whole point of the carbon tax. It's like stepping on the gas peddle and on the brake peddle at the same time! Does the government even know what it's doing here? If it's going to tax fuel only to then subsidize it, then that defeats the whole point of a carbon tax and so we might as well just scrap it. If the goal is in fact to reduce fuel consumption, then we need to accept that a decline in the auto and fuel sectors will be a logical consequence of that and to adapt accordingly such as by lowering taxes elsewhere. I favour the latter option myself; but either way, let's at least ensure that we maintain consistent policies and not waste tax dollars supporting two contradictory government policies that just undermine one another.

 

What are your thoughts on how to eliminate this ridiculous contradiction in government policies. It's like its left hand doesn't know what the right hand is doing.

[Hates politicians]

Quit interfering with industry and get the pipelines built anybody who doesnt want oil then cut them off of everything involving oil.

[Bonam]

17 minutes ago, Machjo said:

Unfortunately, and perhaps shockingly, it appears that those who promoted the carbon tax have been taken by surprise by declines in the auto and fuel industries even though that was the whole point of it!!!!

Actually I would anticipate that increases in carbon taxes (and thus fuel costs) would spur growth in the auto industry, not decline. High gas prices incentivize people and companies to replace old, inefficient vehicles with modern more efficient vehicles, including hybrids, plug-in hybrids, and electrics. Almost all auto manufacturers now offer a variety of such models. Hybrids often cost only a small premium over gas powered equivalents and can provide up to 50% improved fuel efficiency. 

[Machjo]

6 minutes ago, Bonam said:

Actually I would anticipate that increases in carbon taxes (and thus fuel costs) would spur growth in the auto industry, not decline. High gas prices incentivize people and companies to replace old, inefficient vehicles with modern more efficient vehicles, including hybrids, plug-in hybrids, and electrics. Almost all auto manufacturers now offer a variety of such models. Hybrids often cost only a small premium over gas powered equivalents and can provide up to 50% improved fuel efficiency. 

Maybe, but that still doesn't explain subsidies to the fuel industry.

[turningrite]

42 minutes ago, Machjo said:

So now they're proposing bailing out the auto and fuel industries, which of course would totally undermine the whole point of the carbon tax. It's like stepping on the gas peddle and on the brake peddle at the same time! Does the government even know what it's doing here?

I suspect JT understands that his carbon tax (er, "tax on pollution") is a crock. It allows him to genuflect in the direction of progressive orthodoxy as a cover for creating yet another redistributive program funded by carbon revenues. It's hypocrisy, of course, but what else would we expect? Many Canadians are likely unaware that the Trudeau family fortune originated in selling gasoline. I guess it's not good enough for other Canadians to make a living in the industry or rely on services funded by the taxes generated by it. Oh well, he's going to prop up the energy industry in the West while touting the moral virtues of his "pollution" tax. It's not hard to figure that the next federal election is less than a year away, right? It's quite the high-wire act for sure.

Edited December 18, 2018 by turningrite

[Bonam]

9 minutes ago, Machjo said:

Maybe, but that still doesn't explain subsidies to the fuel industry.

If you give the government the benefit of the doubt, the explanation is that the point of the carbon tax is not to put companies out of business but to help them evolve into cleaner and better versions of themselves. To this end, subsidies, especially focusing on improving their processes to be cleaner and more efficient, make sense. Indeed, the linked article mentions that some of the money is specifically for "clean" tech/initiatives. 

If you assume the government is incompetent, then the explanation is also simple. The carbon tax is something that was popular with Trudeau's liberal base and allows him to be popular with world leaders at international events. Meanwhile, the government directionlessly reacts to the economic decline of affected industries by throwing money at them, hoping to minimize the backlash. 

Or, if you assume that the government is nefarious, then the whole scheme is an effort to put more of the economy under government control and amass greater power. The carbon tax penalizes large swathes of industry, potentially driving political opponents and contributors out of business. Meanwhile, those few companies and projects the government chooses to favor will be propped up. At what back-door price? In this way, the government gains greater control over the economy and greater power.  

So whatever your view of government is, it makes perfect sense. 

[AngusThermopyle]

20 hours ago, Machjo said:

https://www.cbc.ca/news/politics/energy-sector-package-sohi-1.4950619

 

 

 

What are your thoughts on how to eliminate this ridiculous contradiction in government policies. It's like its left hand doesn't know what the right hand is doing.

Simple. Vote this disaster and his cabal of performing seals to the curb. Tah dah! Contradiction eliminated!

[eyeball]

22 hours ago, Machjo said:

What are your thoughts on how to eliminate this ridiculous contradiction in government policies. It's like its left hand doesn't know what the right hand is doing.

No, its more like the right and left hands hate each other's guts.

With a an ideological pendulum that swings back and forth across a political landscape more like a wrecking ball is it any wonder our government's policies swing wildly one way then another while getting nowhere?

[Thinkinoutsidethebox]

On 12/18/2018 at 12:27 PM, Bonam said:

 Hybrids often cost only a small premium over gas powered equivalents and can provide up to 50% improved fuel efficiency. 

"up to 50% improved fuel efficiency" is a very important statement. Travelling any distance hybrids lose their advantage and can bacome even less efficient than their petroleum only counterparts due to their extra weight and less efficient powertrains. 

[cannuck]

As is the problem with everything else for the last three years, we are trying to understand the reasoning behind the actions of people who don't have the mental discipline or capacity to be reasonable.  $1.6Bn of loans of any kind are pointless in the oil patch.   That is not even the cost of designing and permitting one single SAGD project.  Government interfering in marketplaces with idiocy such as the "carbon tax" are a formula for absolute disaster.

I have seen a lot of stupid people get into politics, but I have never in my life seen such a perfect storm of mental midgets being handed the keys to the country's pocketbook.

[Thinkinoutsidethebox]

The government knows exactly what it's doing. It's become an equation to buy votes now that the next election is coming up. 

Get the unpopular policies (legacy projects) out of the way during the first half of the term, do what appeals to the voters the second half. Politians that don't want another term stick to their unpopular agendas. 

[eyeball]

On 12/18/2018 at 11:02 AM, Machjo said:

The government wants a carbon tax to deter oil consumption. 

The government also wants to encourage more consumption of oil.

The contradiction doesn't get any more stark.

[Iznogoud]

7 hours ago, eyeball said:

The government also wants to encourage more consumption of oil.

The contradiction doesn't get any more stark.

Quite so.  The government of Canada is between a rock and a hard place.  It wishes to have Canada do its part in reducing global greenhouse gas emissions, but is under pressure from the oil producing provinces to get their oil to market.  The simplest way to get people to use less energy is to raise prices through some sort of tax - remember that the jump in oil prices in the 1970s had a marked effect on fuel efficiency in automobiles and building construction. 

There are other ways to do this, one being that the government could actually give people tax breaks for buying hybrid or electric cars.  Of course that would result in an immediate uproar from those who oppose subsidizing green energy and from the oil industry which does not want to see a drop in fuel consumption.

Either way the government is going to face severe criticism; either from environmentalists or those who support the oil industry. 

[Machjo]

32 minutes ago, Iznogoud said:

Quite so.  The government of Canada is between a rock and a hard place.  It wishes to have Canada do its part in reducing global greenhouse gas emissions, but is under pressure from the oil producing provinces to get their oil to market.  The simplest way to get people to use less energy is to raise prices through some sort of tax - remember that the jump in oil prices in the 1970s had a marked effect on fuel efficiency in automobiles and building construction. 

There are other ways to do this, one being that the government could actually give people tax breaks for buying hybrid or electric cars.  Of course that would result in an immediate uproar from those who oppose subsidizing green energy and from the oil industry which does not want to see a drop in fuel consumption.

Either way the government is going to face severe criticism; either from environmentalists or those who support the oil industry. 

No need to subsidize. Just make the carbon tax a tax shift rather than a tax increase. This would result in tax reductions in all other industries to compensate.

[Dougie93]

Pretty simple, the oil from Alberta is not the oil we put in our cars.   The oil we put in our cars comes from Saudi Arabia and then gets refined in New Brunswick, so that oil is not subsidized.  The oil from Alberta is for export, so that domestic oil industry is being subsidized for said purpose.  

 

Not that I'm advocating for corporate welfare mind you, but Canadians in general insist on it, so the government is simply bending to the will of the electorate, which, according to the constitution, is their job.   /shrugs