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CMHC rubberstamps $102 million in bonuses amid housing affordability crisis

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From the Canadian Taxpayers Federation

Author: Ryan Thorpe

The Canada Mortgage and Housing Corporation dished out more than $27 million in bonuses in 2023, according to access-to-information records obtained by the Canadian Taxpayers Federation.

That pushes the total bonuses at the CMHC to $102 million since the beginning of 2020.

“Why is the CMHC patting itself on the back and showering staff with bonuses when Canadians can’t afford homes?” said Franco Terrazzano, CTF Federal Director. “If the CMHC’s number one goal is housing affordability, then it doesn’t make sense to hand out $100 million in bonuses during a housing affordability crisis.”

Ninety-eight per cent of the CMHC workforce took a bonus in 2023.

At least 2,283 CMHC staffers took home a bonus last year, costing taxpayers $27.2 million, with the average bonus coming in at about $11,800.

The CMHC’s 10 executives received $4.1 million in total compensation in 2023. That includes $3.1 million in salary (for an average of $311,000) and $831,000 in bonuses (for an average of $83,000).

The CMHC also paid executives $211,000 in other “benefits.”

More than 2,000 CMHC staffers, representing 89 per cent of its workforce, also got a pay raise last year. Not a single employee received a pay cut.

There are now 1,073 CMHC bureaucrats taking home a six-figure annual salary, a 15 per cent increase over 2022, representing nearly half (46 per cent) of its workforce. Those six-figure salaries cost taxpayers a combined $140 million in 2023.

“The CMHC could do more to end the housing affordability crisis by hiring a thousand carpenters, rather than paying a thousand bureaucratic pencil-pushers six-figure salaries,” Terrazzano said.

The CMHC is “driven by one goal: housing affordability for all,” according to its 2023-2027 corporate plan.

Polling from Ipsos and Global News in 2023 shows 63 per cent of Canadians who don’t own a home have “given up” on ever owning one. Nearly 70 per cent of respondents said home ownership in Canada is “only for the rich.”

In April 2024, the Royal Bank of Canada said it was the “toughest time ever to afford a home as soaring interest costs keep raising the bar.”

The RBC said ownership costs were propelled to a “new summit” in the fourth quarter of 2023, with a “household earning a median income (needing) to spend a staggering 62.5 per cent of it to cover the costs of owning an average home at market price.”

“Affordability worsened in all markets we track,” the RBC said, with the housing in Vancouver, Victoria and Toronto experiencing “the biggest deterioration,” and affordability in Ottawa, Montreal and Halifax being “at or near all-time worst levels.”

In the 2023 Budget, Finance Minister Chrystia Freeland said, “the government will also work with federal Crown corporations to ensure they achieve comparable spending reductions, which would account for an estimated $1.3 billion over four years.”

“The feds need to stop rewarding failure with bonuses,” Terrazzano said. “Freeland said she would find savings in Crown corporations and these bonuses should be the first thing on the chopping block.”

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Economy

Carbon tax costs Canadian economy billions

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From the Canadian Taxpayers Federation

Author: Franco Terrazzano 

This tax costs Canadians big time at the gas pump, on home heating bills, on the farm and at the dinner table.

The Canadian Taxpayers Federation is calling on the federal government to scrap the carbon tax in light of newly released government data showing the tax will cost the Canadian economy about $25 billion in 2030.

“Once again, we see the government’s own data showing what hardworking Canadians already know: the carbon tax costs Canada big time,” said Franco Terrazzano, CTF Federal Director. “The carbon tax makes the necessities of life more expensive and it will cost our economy billions of dollars.

“Prime Minister Justin Trudeau must scrap his carbon tax now.”

The government of Canada released modelling showing the cost of the carbon tax on the Canadian economy Thursday.

“The country’s GDP is expected to be about $25 billion lower in 2030 due to carbon pricing than it would be otherwise,”  reports the Globe and Mail.

Canada contributes about 1.5 per cent of global emissions.

Government data shows emissions are going up in Canada. In 2022, the latest year of data, emissions in Canada were 708 megatonnes of CO2, an increase of 9.3 megatonnes from 2021.

The federal carbon tax currently costs 17 cents per litre of gasoline, 21 cents per litre of diesel and 15 cents per cubic metre of natural gas.

The carbon tax adds about $13 to the cost of filling up a minivan, about $20 to the cost of filling up a pickup truck and about $200 to the cost of filling up a big rig truck with diesel.

Farmers are charged the carbon tax for heating their barns and drying grains with natural gas and propane. The carbon tax will cost Canadian farmers $1 billion by 2030, according to the Parliamentary Budget Officer.

“No matter how many times this government tries to put lipstick on the carbon tax pig, the reality is clear,” said Kris Sims, CTF Alberta Director. “This tax costs Canadians big time at the gas pump, on home heating bills, on the farm and at the dinner table. Trudeau should make life more affordable and improve the Canadian economy by scrapping his carbon tax.”

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New York and Vermont Seek to Impose a Retroactive Climate Tax

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From Heartland Daily News

By Joshua Loucks for the Cato Institute.

Energy producers will be subject to retroactive taxes in New York if the state assembly passes Senate Bill S2129A, known as the “Climate Change Superfund Act.” The superfund legislation seeks to impose a retroactive tax on energy companies that have emitted greenhouse gases (GHGs) and operated within the state over the last seventy years.

If passed, the new law will impose $75 billion in repayment fees for “historical polluters,” who lawmakers assert are primarily responsible for climate change damages within the state. The state will “assign liability to and require compensation from companies commensurate with their emissions” over the last “70 years or more.” The bill would establish a standard of strict liability, stating that “companies are required to pay into the fund because the use of their products caused the pollution. No finding of wrongdoing is required.”

New York is not alone in this effort. Superfunds built on retroactive taxes on GHG emissions are becoming increasingly popular. Vermont recently enacted similar legislation, S.259 (Act 122), titled the “Climate Superfund Act,” in which the state also retroactively taxes energy producers for historic emissions. Similar bills have also been introduced in Maryland and Massachusetts.

Climate superfund legislation seems to have one purpose: to raise revenue by taxing a politically unpopular industry. Under the New York law, fossil fuel‐​producing energy companies would be taxed billions of dollars retroactively for engaging in legal and necessary behavior. For example, the seventy‐​year retroactive tax would conceivably apply to any company—going back to 1954—that used fossil fuels to generate electricity or produced fuel for New York drivers.

The typical “economic efficiency” arguments for taxing an externality go out the window with the New York and Vermont approach, for at least two reasons. First, the goal of a blackboard or textbook approach to a carbon tax is to internalize the GHG externality. To apply such a tax accurately, the government would need to calculate the social cost of carbon (SCC).

Unfortunately, estimating the SCC is methodologically complex and open to wide ranges of estimates. As a result, the SCC is theoretically very useful but practically impossible to calculate with any reasonable degree of precision.

Second, the retroactive nature of these climate superfunds undermines the very incentives a textbook tax on externalities  would promote. A carbon tax’s central feature is that it is intended to reduce externalities from current and future activity by changing incentives. However, by imposing retroactive taxes, the New York and Vermont legislation will not impact emitters’ future behavior in a way that mimics a textbook carbon tax or improves economic outcomes.

Arbitrary and retroactive taxes can, however, raise prices for consumers by increasing policy uncertainty, affecting firm profitability, and reducing investment (or causing investors to flee GHG‐​emitting industries in the state altogether). Residents in both New York and Vermont already pay over 30 percent more than the US average in residential electricity prices, and this legislation will not lower these costs to consumers.

Climate superfunds are not a serious attempt to solve environmental challenges but rather a way to raise government revenue while unfairly punishing an entire industry (one whose actions the New York legislation claims “have been unconscionable, closely reflecting the strategy of denial, deflection, and delay used by the tobacco industry”).

Fossil fuel companies enabled GHG emissions, of course, but they also empowered significant growth, mobility, and prosperity. The punitive nature of the policy is laid bare by the fact that neither New York nor Vermont used a generic SCC or an evidentiary proceeding to calculate precise damages.

Finally, establishing a standard in which “no finding of wrongdoing is required” to levy fines against historical actions that were (and still are) legally permitted sets a dangerous precedent for what governments can do, not only to businesses that have produced fossil fuels but also to individuals who have consumed them.

Cato research associate Joshua Loucks contributed to this post.

Originally published by the Cato Institute. Republished with permission under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

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