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Posts Tagged ‘Stephane Dion’

The Return of the Carbon Tax

Monday, November 23rd, 2009

November 22, 2009

Lemme tell you about a carbon tax you’re gonna love. Two such taxes, actually. I tell you, kid, Stephane Dion had the right idea, but the wrong sales pitch.

The fun starts with the government giving you maybe $2000 as a carbon dividend. You like it so far? Thought so. And the government gets the money by imposing a tax on everything that emits carbon dioxide into the air. The total amount raised by the carbon tax is the same amount that’s being distributed as a dividend. So it’s a wash. The government is no better off at the end of the day.

But you’re better off, if you’ve been frugal with energy, living in a snug house with solar hot water and wood heat, travelling on public transport, eating local food. You lose a bit of your dividend in taxes on gasoline and electricity and what-not, but you get to keep a good chunk of your carbon dividend. Let’s say you pay $400 more in taxes. That money just reduces your windfall dividend. The carbon tax still leaves you $1600 ahead. You like it so far, sonny?

Fred Foulwater doesn’t.

Fred’s a carbon glutton, so he’s definitely worse off. Sure, he also gets his $2000 dividend — but he lives in a huge house in the outer suburbs, he doesn’t turn down his thermostat, and he commutes 60 km. to work in a monstrous SUV. He has a penchant for exotic tropical fruit in midwinter, and he flies a lot, so in the end he pays a lot of tax — which doesn’t exactly feel like a tax, but feels like higher prices. Let’s say Fred’s profligacy adds $3600 to his overall tax bill. So the new taxes have eaten up all of his $2000 dividend and another $1600 besides. That’s the $1600 that ended up in your pocket, buddy.

Pollute if you want. Buy junk if you like. Emit as you choose. But it’s going to cost you — and the money captured from you goes directly to your clever neighbours. As time goes by and the whole society becomes more serious about slashing emissions, the taxes and the dividend go up. Stupidity becomes more and more expensive.

Now this is simple stuff. Basic economics, kid. Raise the cost of bad behaviour. Lower the price on good behaviour. Watch things change. Why do you think cigarettes — which once cost $3 a carton — now cost $100?

That’s the first tax — easily administered, totally fair, a boon to the poor and the smart. The second one is equally simple. (It comes from the celebrated economist Jeff Rubin, who recently spoke in Halifax.) Put a hefty tax on factory emissions in the US and Canada, which will run up the price of, say, steel — but tax imported steel, too, by imposing a tariff based on the carbon emitted during its manufacture overseas.

Since North America tends to have cleaner plants, the carbon tax gives an immediate advantage to our steelmakers. And once we add the true costs of the emissions into the price of the steel, it turns out to be cheaper to make the steel where it’s going to be used. Even if the final price were identical, we still have the advantage — because we don’t have to pay, in cash and in carbon credits, to ship our steel halfway across the world.

So the jobs that used to migrate away to low-wage havens overseas start coming back. Apply the same principle to food, and food imports slow to a trickle, while local farms start making money. Our whole economy turns green and wakes up.

Environmentalists and trade unionists discover that they’re allies. They start working together. They form organizations like the Blue Green Alliance in the US — the Steelworkers, the Communications Workers, the Utility Workers and the Laborers Union on the one hand, and the Sierra Club and the National Resources Defence Fund on the other. Their slogan is Good Jobs, Clean Environment, Green Economy.

More jobs, a green economy, better air, better food. All brought to you not by magic, but by the astute application of taxes. Taxes, kid! Gotta love ‘em!

– 30 —

The Vanishing Prime Minister

Sunday, December 7th, 2008

December 7, 2008

I fear it’s all my fault. Six weeks ago, on October 18, just two days before the federal election, I made some innocent observations about the probable results.

“Consider the results of recent polls,” I wrote, “which show the Harper crowd at about 35%, the Liberals near 25%, the NDP around 20%, the Greens at 12% or so, and the Bloc somewhere under 10%. Do the math. If those percentages were reflected in seats, then any two of the first three would have enough support to challenge the Conservatives, and to ask the Governor-General for an opportunity to form a government…. And the centre-left parties don’t have to merge in order to rule. They only need to learn the tricks of coalitions and voting alliances, like politicians in other multi-party legislatures like those of Germany, Ireland, Italy, France and Israel.”

I didn’t know that the opposition leaders read this column so carefully. And now look what I’ve done – pulled the rug from under the government, turned up the heat on the Governor-General, and detonated a constitutional crisis.


What I didn’t predict, of course, was that the Prime Minister would precipitate the new era by popping his own head into the mouth of a lion and daring it to chew – an action rooted in his own cold cleverness and his appalling lack of judgment. (If he had had his way, remember, our soldiers would be fighting in Iraq and Maher Arar would still be in a black hole in Damascus.) This self-inflicted crisis could be a career-terminating move. His main appeal to his party was that he could win. Without that aura, he’s gone.

The government has gained a few weeks of life by persuading the Governor-General to prorogue Parliament – the first-ever use of prorogation as a survival technique. The Prime Minister presumably hopes that the opposition coalition will implode between now and late January – aided, no doubt, by late-night offers of Cabinet posts and Senate seats to any wavering Liberals. Shades of Stronach.

Meanwhile, the Harperites will try to whip up the Canadian public to smite Stephane Dion for trying to do exactly what Harper tried to do in 2004, and Stockwell Day in 2000 – join with the dreaded socialists and the separatists to take power without an election. And if his government is nevertheless defeated in January, Harper might even try to persuade the Governor-General to call another election.

In politics, six weeks is forever, and Harper could yet wriggle through. With a leadership contest underway, the Liberals are ill-positioned to govern, and the cracks in the glue that binds the coalition are easy enough to see.

Still, if the coalition parties can stay focussed on what they share, they may well be able to stick-handle their way to power, and they might make a respectable government. They have powerful incentives to make their partnership work, and substantial common interests in areas like the economy and the environment.

The arrangement is risky for the NDP, which will have to tolerate policies it fundamentally detests, like corporate tax cuts and the Afghanistan mission. But the NDP may be surrounded by what Pogo the peerless possum once called “insurmountable opportunities.”

The NDP’s political achievements – which include policies like pension reform, tax reform and medicare – have always come from controlling the oxygen supply of Liberal minority governments. The trap is that if the policies work, the Liberals get the credit and the NDP gets trampled in the subsequent stampede to majority government.

But a coalition could be different. The NDP would have its own ministers within the cabinet. If those ministers were deft and nimble, they could make a real difference – and also capture the credit for their achievements.

Not the least of their achievements would be ridding us of Stephen Harper.

“You know,” said a friend last week, “I’m beginning to loathe this guy almost as much as Mulroney.”

Hold on now, buddy. That’s a big claim. I admit that Harper has united both the right and the left, strained the fabric of the nation and single-handedly rendered the population bilious and apoplectic. But challenge Mulroney? Buddy, that’s a big, big claim.

– 30 –

Canada’s Political Kaleidoscope

Thursday, October 16th, 2008

October 12, 2008

It’s Saturday, and Election Day is Tuesday. The markets are making like ski jumpers, taking oil prices and the loonie down with stocks, and roiling the electorate as well. The election results are anyone’s guess.

But beneath today’s campaign, some long-term changes are afoot. For example, an insistent theme among the pundits has been the fragmentation of the left, and the advantage it gives to the united right led by Stephen Harper. The left, we’re told, will inevitably unite, as the right did, undergoing the political equivalent of a corporate merger aimed at regaining market share.

I’m not so sure.

Three of the four parties to the left of the Harperites are built around a strong set of principles. New Democrats are dedicated social democrats, the Greens are channelling the planet, and the Bloc Quebecois wants a sovereign Quebec. Furthermore, the NDP and the Greens have gained significantly in this campaign, and the Bloc’s support, though fluctuating, has remained substantial. Why would any of these parties throw in the towel?

That leaves the Liberals, innocent of principles, tacking to port or starboard in response to the shifting winds. In fairness, many Liberals would argue that a stable government for a country as large, fractious and varied as Canada must be a pragmatic coalition that eschews rigid principles. For the past century, that devout opportunism has been a winning strategy – but its day may be over.

The Liberals today find themselves led by an admirable Green-hearted man whose signature policy is a complicated tax measure that demands explication in a language still foreign to him, as the famous ATV interview clearly showed. Indeed, whenever he speaks, Dion infuriates the grumbling minority in English Canada who consider that the Quebec tail has been wagging the Canadian dog for decades. And the author of the Clarity Act is not even very popular in Quebec.

So, despite a brief blip of recent enthusiasm, the Liberals never gained much traction. The party has also been badly weakened by the Martin-Chretien wars, and by the out-migration of all its heavy hitters – Manley, Rock, Tobin, Copps, Graham, McKenna. Its surviving MPs are likely to be in a mutinous mood after the election. Without the discipline of power or the prospect of power, this is not a party with any great internal cohesion.

Now consider the results of recent polls, which show the Harper crowd at about 35%, the Liberals near 25%, the NDP around 20%, the Greens at 12% or so, and the Bloc somewhere under 10%. Do the math. If those percentages were reflected in seats, then any two of the first three would have enough support to challenge the Conservatives, and to ask the Governor-General for an opportunity to form a government. They could then do what Harper has done, namely to attract just enough support from a third party to survive the inevitable votes of confidence.

That won’t happen soon. But the numbers underline the point that Canada is a centre-left country which is now being steered by a right-wing minority. That’s an unstable situation. And the centre-left parties don’t have to merge in order to rule. They only need to learn the tricks of coalitions and voting alliances, like politicians in other multi-party legislatures like those of Germany, Ireland, Italy, France and Israel.

The party which seems at risk is the Liberal Party. Its only real raison d’etre was to put a roof over an improbable alliance of interest groups, and that alliance has fallen apart. Its once-solid base in Quebec has vanished, as has its once-reliable strength among women and immigrants. Its weakness could easily accelerate into collapse.

For that matter, the Harper Conservatives remain an uneasy marriage of former Progressive Conservatives and Western true-believers held together largely by the unfamiliar experience of power. When the party loses power and Harper moves on – which will eventually happen – will the Conservative Party also unravel, as it did after Brian

In terms of seats, the next Parliament may well resemble the last one. Beneath the surface, though, strong currents are running. Politically, this election looks like a watershed – the true end of the last century, and the real beginning of the new one.

– 30 –