Dion’s Green Plan or Mintz’s Tax Plan?
There is a lot of the colour green all over Dion’s Green Shift plan.Â But after reading it, the greenery appears almost as superficial as the green shift caps that Liberal MPs wore awkwardly with their business suits at the launch yesterday.
Dion’s plan is really a proposal for a tax shifting budget and doesn’t contain any new proposals to deal with climate change outside of the carbon tax.Â Â The only other element in it that would help the environment are further provisions for accelerated depreciation of green technologies.
This is disappointing and I regret being critical.Â Dion and his staff seem very sincere and well-informed about the economics of this issue.Â They deserve praise for their courage in advocating a new tax while almost all politicians have been terrified of doing so for decades.Â They have also had to deal with the increasingly rabid and incoherent attacks of Baird and Harper on this issue.Â (I don’t know how Harper sleeps in good conscience at night — but perhaps he’s located Mulroney’s left-over stash of Nytol at 24 Sussex).
Their plan includes some good measures that would benefit many low income earners and families, as Marc has noted. Â But these are insufficient and wouldn’t provide any benefit to those who don’t haveÂ any employment income or children.
Ultimately, the plan has the paws of Jack Mintz all over it, who just two years ago was very critical of a carbon tax.Â Now it appears that he seesÂ as carbon taxÂ primarily as a way to raise revenues in order to cut income and business taxes.Â Dion’s proposal is much better than the highly regressive New Brunswick tax reforms that Mintz has also been involved in. But Dion’s Â plan could and should have been much better.Â
It should have provided compensation for all low income households regardless of whether they have employment income or not.Â Those without jobs and low income seniors are the most vulnerable in society and they deserve compensation from the increased costs of a carbon tax as well.Â I can only surmise that they were left out because Mintz has argued against measures such as the GST credit (see his footnote on page 28).
Dion’s plan should have been more effective in its impact on the environment and in reducing greenhouse gas emissions.Â The government needs to play a central role in this fight and it needs to use the funds from a carbon tax to supportÂ green jobs and transition programsÂ and make significant investments in infrastructure so we can build a more sustainable society and economy.Â
Understandably, Dion was up against the crazed Harper and others who were prepared to vilify it as a tax and spend program no matter what.Â But this is exactly what a solid majority of Canadians want, according to recent polls: a carbon tax that doesn’t hurt the most vulnerable and that raises money for public investments to improve the environment instead of being used to fund yet more tax cuts.
Dion should have taken his courage all the way: his plan should have provided compensation for all the vulnerable and outlined a more comprehensive vision for an activist government to develop a sustainable economy.Â The Canadian public is there: it’s time the politicians caught up.Â It shouldn’t take that much more courage to stand up to a bully like Harper if millions of Canadians are in support.
N.B.Â I’ve finally published some of the analysis I did for the Alternative Federal Budget (now credited in the press to the Green Budget Coalition) on the direct and indirect impacts of a carbon tax for different household income groups on the CUPE website.Â There’s a simple rule of thumb that can be used: a broad-based carbon tax will increase costs for each Canadian by about $100 a year for every $10 charged per tonne of carbon dioxide.
This means that, to be equitable,Â any carbon tax proposals should include a refundable credit or similar supportÂ ofÂ at least $100 per person for all low andÂ middle-income households for every $10 per tonne charged.Â Any plan that doesn’t provide this will be unfair and make the most vulnerable worse off financially.Â Â