IS ANYBODY AGAINST A CARBON TAX?

There has not been a big issue separating the federal parties since the election of 1998 was fought on free trade. Now, as a result of Stephane Dion’s announcement there will surely be a big issue in the next federal election. It is called a carbon (pollution) tax and its purpose is to slow global warming.

There is no longer much scientific disagreement of the close connection between the emission of greenhouse gases and the inexorable rise in the earth’s temperature. Nor is there much disagreement that the burning of fossil fuels is the primary culprit. An essential part of a market-based solution must involve imposing a cost on those responsible for those emissions. The result would be a greater incentive to find ways either to reduce the burning of fossil fuels altogether or to continue burning them while preventing the toxic emissions from polluting the atmosphere. It’s simple. Tax fossil fuels and reduce global warming.

But that’s only the first half of the policy which will raise more than 15 billion in new taxes. The other half is that every dime of these carbon taxes will be returned to Canadians in the form of tax cuts and tax credits. So « the green shift » at one stroke creates the right incentives to reduce fossil-fuel use while not increasing the government’s tax take.

The richer we are, the more cars we own, the more air travel we do, and the more oil or electricity we use to heat our larger homes. So a carbon tax which raises the price of these products will collect more tax revenue from high-income households than from low-income ones.

Look at it this way. Imagine three income groups – low, middle and high – and suppose that the amount of carbon tax collected annually from the three groups is $3,000, $6,000, and $9,000 respectively. If there were equal numbers of taxpayers in each group, the government would then need to reduce income taxes by $6,000 for each taxpayer. The low-income households would clearly be better off while the middle-income group would see no change in their total after-tax income. Only the higher income households would be worse off because their income-tax reduction would be insufficient to cover their higher carbon taxes.

So a new Liberal government under Dion’s carbon tax would ensure that lower-income Canadians would end up the real winners. In addition, of course, to the environment.

Do you agree that climate change is happening?

Do you support Dion’s carbon tax?

Can any reasonable person be against such a task?

IS A CARBON TAX A GOOD IDEA?

There must be a federal election by October 2009, sooner if the Harper government were to fall on a confidence motion in the Commons.

In most federal elections there is no big issue. In fact the major parties dive for the centre ground so that, in fact, there is not that much difference in the party platforms. Most Canadian voters, I venture to guess, make their decision on the basis of their view of the leaders. Are they trustworthy, honest, competent, comfortable in their skins? Charisma is not a factor in contemporary elections in Canada since no leader has much of it.

There hasn’t been a big issue in a federal contest since the free trade election of 1988. Could the next federal election be decided on a big issue? Could be. The issue is called a carbon tax.

The rationale behind a carbon tax is fairly simple: that we should tax less the things we want more of – work, savings, investments – and tax more the things we want less of, like greenhouse gases. The intention of a carbon tax is environmental, to reduce emissions of carbon dioxide and so slow global warming. Such a tax can be implemented by taxing the burning of fossil fuels – coal, petroleum products such as gasoline, aviation fuel and natural gas – in proportion to their carbon content.

This direct taxation is transparent. It can be popular with the public if it is revenue neutral i.e. if the revenue from the tax is returned by reducing other taxes.

Could a carbon tax become the big issue in the next federal election? Indeed it could. And the man who could make it one is Liberal leader Stephane Dion. He is thinking of putting a carbon tax at the centre of the next Liberal platform.

Dion has been encouraged by British Columbia Premier Gordon Campbell’s groundbreaking introduction of a carbon tax earlier this year, a tax that has been well received by B.C. voters.

Mr. Dion has promised that his carbon tax would be revenue-neutral, raising about $16-billion which would be returned to middle-class and working Canadians through tax cuts.

A former Dion advisor says the Liberal leader should be bold: « Make it a Canadian version of Roosevelt’s New Deal. »

A poll just out today indicates that 72 per cent of Canadians think a carbon tax is a positive step.

Do you agree that a carbon tax is a positive step?

Or do you believe a carbon tax would hurt the economy and lead to loss of jobs?

Do you think the Liberals could win a general election promoting a carbon tax?