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Economy

The carbon tax and energy affordability should be centre-stage in the next federal election

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5 minute read

All sorts of carbon tax advocates – environmentalists, academics, political insiders – are saying the following: all those annoying little Canadians who are so vulgar and uneducated as to object to carbon taxes should shut up once and for all.

Their assertion is: the Supreme Court has decided that the federal government can tell the provinces what to do, so the subject is settled.

But no, that is not quite true. What is true, is that IF a federal government wants to impose a carbon tax, it can.

The SCC majority decision is written by a most Trudeau-esque Chief Justice Wagner. In the decision the Chief Justice writes – in a dramatic overreach beyond law to the realm of policy – that climate change is “an existential threat to human life in Canada and around the world”. He then uses that as the basis for his affirmation of the federal government’s use of the Peace, Order and Good Government clause in the constitution.

Fine. We should all be troubled that the SCC has done this, but so be it. For my part, I thoroughly disagree with this decision, as I wrote in my previous blog post.

But the effect of the decision is not to bury the carbon tax issue, notwithstanding the arrogance and the climate alarmism of 6 of the 9 Supreme Court Justices.

What the SCC actually did is kick the carbon tax issue right back onto the front page of national politics.

What?

Yes, thanks to the SCC decision, we are all now once again talking about the carbon tax.

The fact that the Trudeau government has been told it can impose a carbon tax, does not mean that any successor federal government must impose a carbon tax.

Canadians do believe in climate change. I do.

And all of us are told constantly by many – from the likes of Greta Thunberg, and Justin Trudeau (and now) the Chief Justice of the SCC – that climate change is an existential threat. And now we are told that it must be addressed by carbon taxes.

Well …  no, actually.

That isn’t a logical sequencing of things. A belief in climate change doesn’t require a belief in it being an existential threat nor does it require an embrace of carbon taxes.

Making that point is hard, in the midst of all the noise.

But politicians with the courage to stand up for Canadians can make this point.

Politicians who care about the issue of affordable energy can, and should, make the case against carbon taxes.

The anti-carbon tax fight requires a pushback against the establishment interests who have a platform in mainstream media and elsewhere. It requires a pushback against the slew of policy wonks who like to say “carbon taxes just make so much sense.” And it requires a pushback against the many people who insult everyday Canadians who are sick and tired of watching their taxes go up.

If politicians of conviction have the courage to mount such a pushback, if they are prepared to listen to Canadians instead of trying to shut them down, they have a shot to articulate an alternative vision that is in the interests of Canadians’ long-term economic well-being.

In an upcoming blog, I will offer some suggestions for that alternative vision.

Click here for more articles from Dan McTeague of Canadians for Affordable energy

Dan McTeague | President, Canadians for Affordable Energy

 

An 18 year veteran of the House of Commons, Dan is widely known in both official languages for his tireless work on energy pricing and saving Canadians money through accurate price forecasts. His Parliamentary initiatives, aimed at helping Canadians cope with affordable energy costs, led to providing Canadians heating fuel rebates on at least two occasions.

Widely sought for his extensive work and knowledge in energy pricing, Dan continues to provide valuable insights to North American media and policy makers. He brings three decades of experience and proven efforts on behalf of consumers in both the private and public spheres. Dan is committed to improving energy affordability for Canadians and promoting the benefits we all share in having a strong and robust energy sector.

 

An 18 year veteran of the House of Commons, Dan is widely known in both official languages for his tireless work on energy pricing and saving Canadians money through accurate price forecasts. His Parliamentary initiatives, aimed at helping Canadians cope with affordable energy costs, led to providing Canadians heating fuel rebates on at least two occasions. Widely sought for his extensive work and knowledge in energy pricing, Dan continues to provide valuable insights to North American media and policy makers. He brings three decades of experience and proven efforts on behalf of consumers in both the private and public spheres. Dan is committed to improving energy affordability for Canadians and promoting the benefits we all share in having a strong and robust energy sector.

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conflict

Indonesian leader calls for unity, braces for global crises

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By Niniek Karmini in Jakarta

JAKARTA, Indonesia (AP) — Indonesia’s president called on all citizens to remain united, vigilant and alert as they face crises fueled by the war in Ukraine and coronavirus pandemic in his State of the Nation address Tuesday.

After two years of remote meetings amid pandemic restrictions, more than half of Indonesia’s Parliament was in attendance as President Joko Widodo told them and top officials on the eve of Independence Day that regional tensions are threatening security.

“We must always remain vigilant, cautious and alert,” Widodo said. “Crisis after crisis still haunts the world.”

He noted that when war broke out in Ukraine causing energy and food crises, the world was still grappling with the health and economic impacts of COVID-19. Some countries are predicted to go bankrupt, while over 550 million people face extreme poverty and 345 million others face food shortages and famine, Widodo said.

“The challenges are not easy for the world and for Indonesia. We must face those challenges with prudence and vigilance,” he said.

Russia’s war in Ukraine has exacerbated rising prices in Indonesia amid ongoing supply chain disruptions from the pandemic, causing cooking oil prices to soar while the interruptions in wheat, soybeans and corn have affected the cost of several foods.

In April, Indonesia banned all exports of crude palm oil, a key ingredient in cooking oils, for a month amid a series of student protests against skyrocketing food prices. Indonesia and Malaysia are the world’s largest exporters of palm oil, accounting for 85% of global production.

As the host of the Group of 20 richest and biggest economies this year, Indonesia has sought to bridge divisions between members over Russia’s invasion. Widodo has been guarded in his comments about the war in Ukraine in an attempt to remain neutral.

Widodo was the first Asian leader to visit the warring countries. Ukraine is not a G-20 member, but Widodo has invited Ukrainian President Volodymyr Zelenskyy to the November summit along with Russian President Vladimir Putin, hoping to appease all sides and limit any distractions from the forum’s agenda. Zelenskyy has said he won’t attend if the war is continuing then and has opted to follow the discussions by video link.

The inflation rate in Indonesia has been relatively modest with the shock being mostly absorbed through a budget bolstered by energy subsidies.

Widodo said the state budget recorded a surplus of 106 trillion rupiah ($7.2 billion), allowing the government to provide fuel, gas and electricity subsidies of 502 trillion rupiah ($34 billion) this year to cushion fuel prices.

However, he said the administration must recalculate its energy subsidies to reduce the burden on the budget.

Southeast Asia’s largest economy served as a key exporter of coal, palm oil and minerals amid a global shortage in commodities after Russia’s invasion of Ukraine. Coal exports increased to record levels in March after a brief ban on its shipments early this year to secure domestic supplies.

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Economy

Luxury goods tax on super-rich could hit electric vehicles: expert

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By Marie Woolf in Ottawa

A new tax on yachts, luxury cars and private aircraft designed to hit the super-rich could also cover vehicles meant to help the environment, a tax expert warns.

The luxury goods tax, which will come into force on Sept. 1, will cover cars and SUVs, as well as private planes and helicopters, worth more than $100,000.

The federal tax will also cover yachts and boats — including motorboats — worth more than $250,000.

But senior tax lawyer Héléna Gagné says the new tax could also hit some electric and hybrid vehicles, including Tesla and BMW models, which cost more than $100,000.

The federal government has been encouraging Canadians to invest in clean technology and zero-emission vehicles, which can carry a higher price tag than cars that run on fossil fuels.

Gagné said the thresholds for the tax could also affect people who would not be regarded as wealthy, but have saved up to buy a private plane for a hobby.

“It seems to be assumed that it is only the wealthiest who will be impacted by the luxury tax but it is not necessarily the case,” said Gagné, a partner at Osler, Hoskin & Harcourt LLP. “It can also impact indirectly taxpayers who may not consider themselves as being among the wealthiest but who may decide to purchase an electric vehicle with a retail sales price that happens to be over the $100,000 threshold.”

Adrienne Vaupshas, a spokeswoman for Finance Minister Chrystia Freeland, said the measures, originally proposed in the 2021 budget, are not designed to hit the middle class.

She said the threshold for the tax for boats was deliberately set at $250,000 so it would cover superyachts and not middle-class families buying boats.

Vaupshas said it was “only right and fair that the very wealthiest are asked to pay their fair share.”

“The government was re-elected on a platform that included a commitment to bring forward a luxury tax on yachts, private jets, and luxury cars and implementing this measure is a priority,” she said.

The tax was originally proposed in the 2021 budget. It will cover luxury cars, planes, and boats bought for personal use and leisure. Commercial vehicles, including small planes selling seats, and emergency vehicles are among the classes of vehicle exempt from the new tax.

The tax amounts to either 10 per cent of the taxable amount of the item or 20 per cent of the amount over the price threshold — whichever is less.

The NDP has been putting pressure on the federal government to do more to tax the super-rich. Measures to increase taxes on the wealthiest people in Canada, however, were not included in the Liberal-NDP confidence and supply pact.

NDP critic for tax fairness and inequality, Niki Ashton, said at a news conference last month that she wants the federal government to close loopholes she says are being used by the super-rich and corporations to avoid paying billions in taxes.

This report by The Canadian Press was first published Aug. 11, 2022.

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