Thursday, May 22, 2008

Harper to Canadians: We Can't Help you.

That's the basic premise of his big (Liberal) announcement yesterday.


The Canadian Press

May 21, 2008 at 6:23 PM EDT

Beamsville, Ont. — Canadians stung by record-high energy costs shouldn't look to Ottawa for a gas-tax break as such measures would do little to slash prices at the pumps, Prime Minister Stephen Harper said Wednesday to the chagrin of critics who said there's plenty of room for government action.

With oil prices having more than doubled over a year ago — surpassing $133 (U.S.) on commodities markets Wednesday — Mr. Harper touted broad-based tax cuts as an antidote and slammed Liberal Leader Stephane Dion's plan to tax carbon.

“The ability of governments to affect the price of gasoline per se is so small that it's not worth doing,” Mr. Harper said following an announcement on new food labelling regulations.

TRANSLATION: I blew all the surplus we had and cut the lucrative GST, so we have to get money on the backs of all Canadians. And, my oil buddies and my home province are really happy right now. Screw Ontario, Dalton deserves it.

“What you've really got to do is lower costs for consumers generally, rather than try to fight the upward trend in the price of gasoline.”

Overall tax cuts, like the two percentage points his government has taken off the GST, are the best way to bring savings to consumers, Mr. Harper added.

“What we don't need right now in the face of rising gasoline taxes and rising taxes on energy products are governments that come in and specifically impose carbon taxes on our economy,” he said.

“We think that is a foolish and unnecessary policy being proposed by our opposition.”

TRANSLATION: I hate David Suzuki and I blew the wad when I cut the GST, so now I'm stuck with this inflation thing.

A carbon tax proposal is to be the central plank in the Liberals' election platform. Mr. Dion is expected to unveil the plan before the end of June and then spend the summer trying to explain it to Canadians.

The implementation of a carbon tax would be more about raising revenue than helping the environment, Mr. Harper said.

“If what you really want to do is get money for the government and claim that you're trying to reduce emissions, then you impose carbon taxes.”

TRANSLATION: We still don't believe scientists across the world on this climate change thing. And, we have no idea what we're going to do to get money that we just blew back into the coffers in the face of a major recession with soaring inflation.

Gas prices at the pump and other energy prices were the big impetus behind April inflation, which rose to an annual 1.7 per cent.

Pump prices have risen 11.6 per cent from last April, while fuel oil and other fuels surged 36.9 per cent, the fastest increase since September 2005. Taking gasoline prices out of the calculation, the inflation rate would have been 1.3 per cent in April.

Given that provincial and federal taxes make up almost one-third of the price of gas, it's a myth to say governments can do nothing about the pump price, said John Williamson of the Canadian Taxpayers Federation.

“The government has a great deal to do with rising gas prices; 28 per cent of pump price is tax,” he said.

“If governments were to act, either in solo or in concert, prices would come down.”

The GST cut, Mr. Williamson added, doesn't really affect the price of gas.

TRANSLATION: Harper is full of sh#t.

But Chisholm Pothier, Finance Minister Jim Flaherty's press secretary, said the GST cut has in fact “given Canadians a break at the gas pumps.”

“It lowers the price of gas every time a Canadian fills up their tank,” he said.

Toronto-area Liberal MP Dan McTeague said he also doesn't buy Mr. Harper's argument, and he noted that with fuel prices in their current range, Ottawa stands to add a substantial amount of cash to its coffers.

If prices keep rising unchecked, it could bring the Canadian economy “to its knees,” said Mr. McTeague, a long-time gasoline price watchdog.

“It's already having a troubling, damaging impact on the manufacturing sectors of this country,” he said.

Despite record-high oil costs, prices at the pump — while painfully high — have not yet risen in tandem.

Mr. McTeague predicted that disparity would come to an end as early as Thursday as gas and diesel prices begin to rise.

TRANSLATION: Jim Flaherty is full of sh*t. Canadians are going to pay $1.50 a litre by the end of spring.

Mr. Harper also made stops Wednesday in several southern Ontario communities and held an hour-long roundtable discussion with town residents in Thorold, where he heard their views on the struggling economy, disappearing jobs and other local issues.

Ralph Journeay, who is self-employed and runs his own auto parts business, said he was impressed that Mr. Harper took the time to listen to their concerns, and he supported the prime minister's GST cuts.

He said he couldn't fault Mr. Harper for saying he was powerless to control gas prices.

“Our hands are tied. I wish we could [lower prices] but I don't know that we can,” Mr. Journeay said.

“But that 2 per cent on the GST, that's helping, and hopefully in time we can get rid of all it, get rid of the other 5 per cent. That would be great.”

TRANSLATION: I'm friends with the Conservative party and probably donated to them. (A Ralph D. Journeay has given $890 to the Conservative Party since June 2004). Journalists should be more careful.


JimBobby said...

Whooee! Here's somethin' that confuddles me a bit. Canada is the top country from which the US imports oil. We are an oil producing nation, like Saudi Arabia and Venezuela. In Saudi, they pay 50 cents per US gallon (almost 4 litres). In Venezuela, they pay 9 cents a litre.

Now, nobody thinks the Canadian gummint should or could lower prices to those levels but to say gummint is powerless is to deny that other gummints are quite capable of creating favourable conditions for the gas guzzlin' public..

RuralSandi said...

Gee, just when I'm on a diet - Harper's attitude is let them eat cake.

jaybird said...

I don't get it. One minute the argument is Dion and the LPC are proposing this to help the environment. That a carbon tax will force people to reduce their carbon consumption. Most Canadians consume carbon via their car and their home heating. So, to truly lower our emissions the government must tax all Canadians (regardless of ability to pay). This shows leadership because it is not popular but it is the right thing to do.

Then I read on the liblogs that gas and heating won't be affected by a carbon tax. So how exactly is this supposed to work.

Then you note that gas prices are hurting and may soon cripple Canada's manufacturing sector and that the Cons are negligent because they have cut GST and their is no money in the kitty.

Let's set aside that the LPC has helped the Cons by tacitly and actively voting to keep this govt in power and that has enabled the Cons to limited the federal govts ability to raise revenue. Let's just focus on the idea that the proposed LPC carbon tax policy is supposed to be revenue neutral. Where will the money come from in a proposed LPC govt to address the concerns you have raised? If there is a carbon tax on gas that simply replaces the excise tax then you will be returning the excise tax to the consumer (somehow and at some point during the year) but that excise tax was being used to offset the green car rebate. So by replacing the excise tax with a 'revenue neutral' carbon tax you again decrease the government's ability to incentivize behaviour change in the consumer or have cash to help with increased public transit.

It is easier to secure long term behavioral change by making it easier for people to transition to greener options as opposed to financially penalizing consumers, in effect, limiting their ability to make the personal changes necessary (buy smaller car, retrofit their homes, buy energy efficient appliances, etc.).

No question that Harper/Cons are on the wrong track regarding the environment and the economy but I just don't see the LPC blogosphere and the LPC logic on this carbon tax policy.

Probably because instead of really announcing a fleshed out policy, Dion launched a trial balloon that he could pull back if there was too much push back.

James Curran said...

I see you don't get it. Don't worry about it. It'll come to you eventually. It's already popular with the media and scientists, so they'll help explain it to you.

JimBobby said...

It's already popular with the media and scientists, so they'll help explain it to you.

Ummm... I think it's the job of the proponent to do the explaining. It's difficult for the media to explain something for which they've been provided scant details.

The logic of the carbon tax is that it is not the whole policy. The policy Dion should have floated was tax-shifting.

Treehuggin' Greens like me are generally quite happy when a mainstream, old-line party picks up one of our policies. The problem many Greens are now seeing is that Dion's lack of political acumen is threatening to kill a good policy.

Almost everyone can cut their carbon output. That means almost everyone has a tool with which to lower their carbon taxes. When income is taxed, the only way to lower your income tax is to either make less money or spend more on expensible write-offs -- both put less money in your pocket.

Saving carbon tax by using less energy not only saves tax but saves money on the gas, heating, travel bills. It puts money on your pocket.

It's Dion and the Grits' job to sell their plan. So far, they aren't doing to good a job, despite having the scientists and media on board.


James Curran said...

Yes. Yes. Sell, sell, sell. The pointof this post is that the Conservatives have no clue.

JimBobby said...

I think most Earth-lovers know that Con's have no clue. What they're looking for is someone who does have a clue. Unselling the Con's is not selling the alternatives.


jaybird said...

James:you didn't address my question(s). First and foremost how is this an enviro policy that will work if indeed the carbon tax will not be applied to gasoline or home heating? Doubt Suzuki would be as pleased with plan if that is the case = btw.

If it is a carbon tax on industry and some consumer goods, why is a revenue neutral carbon tax BETTER than a cap and trade system on big corporate polluters that has a hard cap (which the LPC plan doesn't seem to). How is a complicated tax shifting policy that leaves no revenue with government BETTER than a penalty on corporations that exceed the cap, a penalty which can then be applied to more public transit or consumer incentives to go green?

NDP, Green and Libs all want to see real action on the environment. True the NDP wants a plan that ensures that working Canadians, and folks with low and fixed incomes don't shoulder a burden that will break them. This is the same principle behind Kyoto and the notion that the developed world that can shoulder the costs take the first steps and that developing nations will come on board as they are able and with the help of the international community.

Applied domestically, cap and trade asks that corporate polluters pay for their carbon usage and as we are able to put more transit, better rail, more green collar jobs, more green affordable housing, etc on line, Canadians will increasingly reduce their personal emissions.

The NDP will also be working on a number of corollary environmental plans that will help Canadians make that transition.

James Curran said...

Good luck with your plan. Try explaining that one to the public too.And you think Dion has a tough sell? Hilarious.

I'll sell ours. Thank you very much.

jaybird said...

pretty simple sell - we are capping pollution and those that exceed it pay the price. We won't increase your fuel or heating costs like the Liberals will and we will make sure corporations pay if they pollute which the Cons won't do. That will be a succinct general campaign message. For voters who want more details on the trade part or a more complete understanding of the NDP Green Agenda they can check it out here:

BTW1 - you didn't really bother to make the argument, I couldn't help but notice...

BTW2 - I know that you care about the immigration reforms, well it would seem that the Liberal senate is also helping the Cons:

"The Liberal-dominated Senate is following their Commons colleagues’ reluctance to stand up to the Harper Conservatives’ immigration changes. The senators are asleep at the wheel and allowing this irreversibly damaging bill to be fast tracked so that Harper can pass his budget implementation bill before the summer recess is unacceptable."

Seems the senate is doing this even though the immigration committee has recommended that the immigration legislation go forward separately. So there is more time for consideration and debate.

So will the LPC vote against 'reforms' or will they throw ethno-cultural communities under the bus along with the working poor and middle-class families?

James Curran said...

I'm starting to think you're on staff with the dippers. Nobody could argue this long about nothing.

I can tell you this, being from the party of immigration, if my party doesn't vote against that bill, I'll be sitting out the next election. So, cheers.

jaybird said...

nope - not a staffer but have been very involved in the past

still no response ;)

JimBobby said...

Whooee! A carbon tax and a cap-and-trade system are by no means mutually exclusive. In fact, there is an argument that they augment one another and work better in tandem than separately.

I'd like to see the NDP show conditional support for the tax-shift/carbon tax. The condition would be creation of a cap-and-trade system to work simultaneously with the carbon tax.

Governments have lots of experience and capability when it comes to applying and collecting taxes. They can ramp up the tax shift very quickly. Governments have far less experience creating market mechanisms. It will take some time to get cap-and-trade up and running.