CKA Forums
canadian forums
Canadian Forums

Author Topic Options
CKA Super Elite
CKA Super Elite
 Edmonton Oilers
User avatar
Posts: 6932
PostPosted: Sat Mar 04, 2017 5:06 pm

Alberta’s carbon tax is already a failure

If you ever meet someone who tells you how humble they are, chances are, they are not.

So too with governments that claim a specific policy is a success. When they oversell it, their beloved initiative may already be a failure.

Enter Alberta’s newest carbon tax, scheduled to hit $30 a tonne by 2018, and which replaced an existing $15 per tonne tax in effect since 2007.

Governing politicians seems nervous about the annual $2.6-billion tax — the one they neglected to mention in their 2015 election campaign.

Consider that on Jan. 2, the day after Alberta’s higher carbon tax took effect, Albertans were informed by Environment Minister Shannon Phillips that the province was “still standing.”

One month later, Phillips told Albertans that she sensed growing acceptance of the tax; the minister remarked it had not been a “massive economic shock.”

With apologies to Hamlet’s mother, the minister doth protest too much.

Higher carbon taxes, which in Alberta’s case, take dead aim at the province’s primary sector, are less like an asteroid hitting a planet. They are more akin to not changing the oil in your automobile. Everything looks normal until the engine components grind each other down and wear out early.

Consider some ways in which a policy might be defined as a success or failure.

First, is the policy economically sound? The province’s climate change plan fails that test.

The province uses carbon tax proceeds to tax a mainly profitable sector (energy) and the rest of us, to subsidize others: corporations that produce renewables and utility companies to “encourage” them to kill cheap coal-fired power.

One can like or dislike that. But that transfer of wealth reveals, by its very act, the uneconomic basis of the policy. Profitable activities do not require subsidies.

Another way to test if a government policy is succeeding are polls. In December 2015, 44 per cent of Albertans disapproved of the carbon tax (with an equal proportion in favour). As of last week, 64 per cent were opposed, with 34 per cent in favour. That means the tax, at its current levels, is unlikely to remain long-term policy.

Perhaps the most important measure of a policy success or failure is if the policy does what its backers hope.

Here, Alberta’s carbon tax is oddly self-defeating. If a government wishes for people to change behaviour, it must levy a tax so punitive that it modifies actions, i.e., less carbon-based activity.

The province obviously intends that as the outcome. Every year the carbon tax is increased, the more punitive it becomes, including for charities such as food banks.

But to offset the higher costs for some, the province is subsidizing just over 1.1 million people. The province claims that will positively affect about 60 per cent of households.

The plan is thus inherently contradictory: The province will tax everyone more in an attempt to change behaviour. It will then subsidize at least one person in 60 per cent of Alberta’s households. That will counteract the government-intended behavioural nudge.

To summarize: the so-called climate change leadership plan includes massive subsidies, so it is an economic failure. Two-thirds of the public doesn’t like the carbon tax, so it is a political failure.

The plan is premised on taxing everyone to change behaviour. Except that a significant portion of the population will be given a subsidy. That subsidy tells them to not change their behaviour — the third failure.

With two of three measurements that governing politicians should care about — public opinion and intended policy effects — the carbon tax is already a failure.

No wonder the province is spending $9 million in taxpayer cash to tell Albertans about its “plan.” No wonder the environment minister relentlessly informs Albertans she senses they like the new tax.

Mark Milke is the author of Tax Me I’m Canadian: A Taxpayer’s Guide To Your Money and How Politicians Spend It.

Post new topic  Reply to topic  [ 1 post ] 

Who is online

Users browsing this forum: No registered users and 3 guests

All logos and trademarks in this site are property of their respective owner.
The comments are property of their posters, all the rest © Powered by © phpBB.