Ignatieff launches anti-middle class, anti-Alberta campaign

[mcqueen625]

Geoffrey, I think your sensationalism is misplaced. Ignatieff might even get the Redmonton vote with this proposal.

This is what Ignatieff's web site has:

The policies presented in the outline include:

an innovative tax-shift on fuels;

a cap on maximum aggregate emissions for major industrial emitters that puts a price on the cost of emissions;

a program that requires automakers to increase market share for low, ultra-low and zero-emissions vehicles;

a partnership with the provinces to set minimum market shares for renewable energy generation;

a carbon sequestration standard to shift the burden for greenhouse gas emissions management to the fossil fuel industry.

limited purchases of international emissions reduction credits to contribute to credible emissions reductions projects in the developing world.

The key features are the carbon tax, world-carbon markets and developing a standard for carbon sequestration. These features make perfect sense.

Geoffrey, I don't know why you are on this "air pollution in Toronto" gig. If people in Toronto are upset about smog, let them solve the problem.

You raise a valid point about a tax grab. What's Ignatieff going to with all the carbon tax revenues?

He'll do the same as every other Liberal PM, give it to Quebec to stop them from crying poor-mouth. After all this time, it still hasen't worked because they are still crying an moaning.

[geoffrey]

Geoffery:

Oil companies don't pay carbon taxes, consumers do.

The oil sands is a major consumer of fossil fuels, in natural gas. They'd pay a ridiculously high share of any introduced carbon tax

Which is it?

None the less, this form of taxation will reduce investment in Alberta oil sands development and hinder the provinces prosperity

I don't buy the idea that taxation or increased royalties will deter investment in the oil sands. There's just too much money to be made right now.

It's both Black Dog. The user of the fossil fuels is going to pay it. The gas station or the gas company doesn't use fuel, it sells it. We pay the tax.

On crude producers, they pay it when they burn Natural Gas to cook up their oil in the oil sands.

So we pay more for gas because of the tax, we pay more from any gas derived from oil sands production and we pay more for plastics.

Sounds like we'll be paying a lot more.

[August1991]

Sounds like we'll be paying a lot more.

But we'll be paying it to ourselves. The money will go out one pocket but will come in another.

What is true is that gasoline will be relatively more expensive compared to other things which will appear relatively cheaper.

But let's put this in the proper perspective. At present, gasoline is getting a free ride (or is being indirectly subsidized) because you don't have to pay for its disposal.

[jbg]

What this has to do with Ignatieff I'm not sure, but neither US nor Canadian gasoline taxes have, since 1972, kept pace with inflation. They should be raised at least to levels that would reflect the impact of inflation, or be roughly quadruple 1972 tax levels. In New York, in 1972, state and federal taxes equaled about 16 cents per gallon. Those should now be around 64 cents per gallon. They are roughtly 45 cents per gallon now.

New York, being a high-taxing state, has lost less ground than other states to inflation in its taxation of gasoline.

[jdobbin]

What this has to do with Ignatieff I'm not sure, but neither US nor Canadian gasoline taxes have, since 1972, kept pace with inflation. They should be raised at least to levels that would reflect the impact of inflation, or be roughly quadruple 1972 tax levels. In New York, in 1972, state and federal taxes equaled about 16 cents per gallon. Those should now be around 64 cents per gallon. They are roughtly 45 cents per gallon now.

I think you hit the nail on the head. Gas prices have definitely not kept pace with inflation and that has resulted in people making poor choices when it comes to the vehicles they drive. It has also meant that in countries that have higher gas prices produce cars with better mileage and better emission standards.

Subsidized energy has also let people buy bigger homes than they probably require.

They were saying on ABC tonight that house prices have collapsed in many parts of the U.S. partly because of rising interest rates but also because energy costs have gone up. And one of those super-sized houses costs plenty to heat and cool.

[August1991]

How does competition force them to lower the retail price, when all of their competitors prices would be equally affected?

Competition doesn't force them to absorb the cost of the supply fluctuations that mysteriously precede summer long weekends... why would competition force them to eat the cost of a carbon tax? I doubt they would, particularly when the government is providing a well-publicized reason for the price hike and the gas companies could claim truthfully that it's not their fault.

....

Either way, this is ultimately coming out of the wallet of Canadian consumers.

Kimmy, it's not obvious that the cost of a tax always comes out of the wallet of Canadian consumers. It depends on the case. I presented a simple scenario where a carbon tax fell entirely on consumers. On reflection, I'm not entirely sure of that. If the US adopted a carbon tax, or if we imposed a carbon tax on oil exports, then Albertan producers would share the burden of the tax along with consumers.

People who can afford to shell out $70k to $100k or more for a Hummer or an Escalade probably don't have to sweat gas prices too much either, and it's probably not a factor in their purchasing decision.

Huh?

Soaring gas prices sent sales of sport utility vehicles into the tank in North America last month.

Sales of the biggest SUVs tumbled as hurricanes Katrina and Rita and fears of gas shortages sent fuel prices soaring to well above $1 a litre across most of Canada and $3 (U.S.) a gallon south of the border.

"These ultra high gas prices are taking a toll on the larger, less fuel-efficient light trucks," said industry analyst Dennis DesRosiers, who heads DesRosiers Automotive Consultants Inc. in Richmond Hill, Ont.

G & M

I've always had the sense that part of the reason people choose to drive a vehicle like that is to show other people that you're a successful person. "I can afford a car like this!" and in the past couple of years the footnote has been added: "...and I can afford to buy gas for it!"

You must be young to make that argument. Like young girls who put on garish make-up, young people are neophytes in the complicated game of advertising status. When you've had a decade or two more experience in reading other people's signals, come back and discuss your idea again.

A question your approach raises: should the carbon tax be applied on oil we export?

Maybe, maybe not. As you noted, another problem is how to impose the tax - where in the distribution chain. I'd also favour a sliding implementation with slowly increasing steps. I'm sure somebody has already given thought to these questions. Maybe I'll do some googling.

One thing that occured to me as I read Ignatieff's plan is, don't a lot of tax-grabs lately seem to be justified with a statement that it'll make Canada a world leader in this or that? I believe in last election it was claimed at various points that applying taxes could make us world leaders in emissionless automobiles, alternative electrical generation, healthcare innovation, advanced manufacturing, and pharmaceutical research.

I usually ignore such "world-class" type arguments. There is an important, hidden point however.

The government could simply order everyone to stop driving on Mondays. This would reduce our CO2 emissions. It would be better to charge people for driving on Mondays and Tuesdays. This would provide people with a choice: drive and pay, or not drive. Now, if we could identifiably charge people for CO2 emissions, then this would provide people with even more choices. Lower emissions and avoid paying.

It also puts the incentive in the right place: on CO2 emissions. There is an incentive for people to invent ways to reduce them.

I don't understand what you're saying. Why isn't a carbon tax applied to consumers a credible symbol of the real issue? Requesting that people pay a fee for the privilege of putting emissions into the air seems justifiable and credible based on standards that we already accept.

The point is that people need not be aware that the carbon tax exists. All consumers need to see is that gasoline is more expensive and all producers need to see is that oil fetches a lower price. We are not playing around with symbols. This is a real change.

The idea that the government has the right to regulate emissions into the air seems to be based on precidents that nobody seems to take issue with. You say that the government needs to claim ownership of the air; I think that the government has already established ownership, but isn't very active in applying this ownership yet.

In essence, you get the basic idea. I'm not going to quibble about details.

Albertans (including Geoffrey) would be appalled if the Albertan government didn't charge royalties when people take oil out of the ground. Yet for some reason, these same Albertans are incensed when someone suggests that the federal government should charge people for putting CO2 into the air.

The air and the ground are both natural resources. To husband them properly, someone should own these resources and exploit them wisely.

[jbg]

I think you hit the nail on the head. Gas prices have definitely not kept pace with inflation and that has resulted in people making poor choices when it comes to the vehicles they drive. It has also meant that in countries that have higher gas prices produce cars with better mileage and better emission standards.

Subsidized energy has also let people buy bigger homes than they probably require.

They were saying on ABC tonight that house prices have collapsed in many parts of the U.S. partly because of rising interest rates but also because energy costs have gone up. And one of those super-sized houses costs plenty to heat and cool.

Absolutely. I live in an affluent area, and literally everyone is re-building their houses as close as they legally can to the lot lines. Remember, the "original" version of these houses were what many of their current owners grew up in, quite happily.

And I drove a Toyota Corolla during the 1980's, a Camry now. The parking lot at soccer games is full of SUV's in spite of $3 US per gallon gas. The free market is starting to catch up with a lot of this foolishness.

[jdobbin]

Absolutely. I live in an affluent area, and literally everyone is re-building their houses as close as they legally can to the lot lines. Remember, the "original" version of these houses were what many of their current owners grew up in, quite happily.

And I drove a Toyota Corolla during the 1980's, a Camry now. The parking lot at soccer games is full of SUV's in spite of $3 US per gallon gas. The free market is starting to catch up with a lot of this foolishness.

If I had the money at the moment, I would consider investing in thermal heating and cooling.

There is a race in Canada for the first full sub-divsion that would be completely thermal rather gas. That would be an incredible achievement.