Carbon Tax: 1 Down , 2 to Go

Stephane Dion and the Liberals, listening to the Green Party knocking at their door in formerly safe seats such as Vancouver Quadra, finally capitulated and announced their support for a carbon tax! Way to go Greens, one down and only the Tories and NDP to go!

The Liberal's "Green Shift" even went so far as stealing the font and pantone colours off the Green Party brochures. We told voters the by-election was a referendum on the carbon tax and we succeeded.

The Liberal Carbon Tax Plan has now been released, on first glance I like it and also feel that their exclusion of the carbon tax from increasing gas prices for four years is the politically right way to implement this. From an environmental and economic point of view, it covers most of the plans and is leaps ahead of their wimpy carbon budget they released last year.

The Liberal plan calls for a phase in of carbon taxes over 4 years. (Starting with $10 a ton and moving to $40 by year 4). It excludes gas taxes for now, while recognizing that there is already the equivalent of a $42 a tonne carbon tax on fuel through the federal excise tax. (This opens the way for future inclusions)

While our Green Party plan still includes an additional $0.12 a litre on automotive gas, I cannot see us justifying it purely for environmental or economic reasons.

I believe there is some tax fairness issues in "tax shifting", because the costs of driving on society are not fully paid for by drivers (nor is the road infrastructure), but I think at this time any additional gas taxes must be exclusively provincial/municipal jurisdiction and go into transportation infrastructure rather than tax refunds.

For heavy emitters, the carbon tax puts a stable price on pollution and as such it is the right thing to do. The corporate carbon tax is the key plank we need to focus on.

For drivers, market instabilities have already put current gas pricing above long term projections and the escalation of gas prices (if they stay high) has already achieved a far more aggressive price increase than our carbon tax was designed to. At nearly a $1.50, the prices are already $0.20 higher than what they would have been had we put a $50 a tonne carbon tax on last June.

Increasing the gas tax arbitrarily now for "environmental reasons" fails to pass the test, for the same reason that the Green Party plan proposed starting with $50 rather than $100.

- The pricing is already high enough for alternatives to compete.
- The market indicators already appear to be there.

We need to give people time to adjust their behavior. Now if gas prices drop back down closer to $1.10/L, then I would fully support reopening it. We need a stable, minimum pricing, for fuels to meet out per capita reductions.

All of the Jaccard studies and reports released by Sukuki and CD Howe were not based on a relative taxation versus commodity costs, but were about putting the proper final pricing. As others suggest, we would be better geared to set baseline pricing for gasoline. I feel that the proper pricing for gas should be closer to $2/litre, but I would not have proposed more than 10-15% net price increases per year. (This year, we are closer to 40%)

Anyways, in all fairness, we should give proper credit to the Liberals for introducing a well written plan.

Our focus should be on getting the pricing on airborn CO2 emissions, rather than playing politics as usual and trying to undermine what looks like an overly effective combination of taxes and offsets.