Inkless Wells

Paul Wells on all the latest out of Ottawa—along with the occasional post about jazz. Follow Paul on Twitter: @InklessPW

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PermanentTaxOnEverything: A little perspective

by Paul Wells on Friday, June 20, 2008 3:13pm - 0 Comments

It’s actually a lot of fun watching everyone get excited, both admirers and detractors, about a policy idea in Ottawa. But this might be a good time for everyone to remind themselves that Dion’s PermanentTaxOnEverything™ is a suggestion for allocating $15 billion, four years out.

The government of Canada plans to spend $200 billion this year.

So (a) If this is the apocalypse, it doesn’t take much to have an apocalypse these days; (b) The same message goes out to everyone saying this plan is the equivalent of a federal budget, or a replacement for the old Red Books. Um, no, it just isn’t; (c) This means that if he wanted to, Stéphane Dion could have three or four more days like yesterday before an election. He just needs to find some other issues on which his ideas are markedly different from the government’s, and on which the virtues of early exposition would outweigh the advantages of pre-writ secrecy.

Because the amazing thing is not that the Leader of the Opposition managed to set the agenda this week. The amazing thing is that we ever got to the point where it would be considered a novelty when the Leader of the Opposition managed to set the agenda. Folks: that’s what leaders of large political parties with a long history of governing the country are supposed to do, and more than once.

Tags: permanent tax on everything, Stéphane Dion, Thelonious Monk always said that once you're swinging y

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Dion has been snookered into releasing the Liberal platform more than 1.5 years before election (October 2009). PM Harper has plenty of time to react with a more compelling (and sellable) plan.

Judging from NDP reaction to Green Shift, I see potential for a Harper/Layton entente on cap and trade (this is also why the election won’t be in 2008 – why would Layton help Liberals bring down Harper Government in order to run on Green Shift?).

A key element of Green Shift is “no carbon tax on gasoline at the pump.” This is designed to pander to taxpayers suffering from large gasoline price hikes. But what Green Shift actually says is that a carbon tax on gasoline is unnecessary because there is already a federal excise tax of 10 cents per litre. But what if Harper announces that, due to high gasoline prices, the Government will reduce or eliminate the excise tax? This will drop the price of gasoline, and force Dion to say that Green Shift now means Liberals have to put a carbon tax on gasoline (otherwise Green Shift makes no environmental sense). This makes Liberals in favour of higher gasoline prices, and Conservatives (and NDP) in favour of lower gasoline prices. Pure Political Gold.

My guess is Harper will wait until BC carbon tax takes effect July 1, come back from G8 Summit in Tokyo, see the reaction, and then move to reduce excise tax, or announce CPC-NDP entente on cap-and-trade (PS both McCain and Obama favour cap and trade), or both, during the summer. The CPC policy convention takes place in mid-November (i.e. after the US election so we’ll know who the next President is and how Democratic (protectionist) the next Congress will be) so there will be every opportunity to roll-out a new Federal Energy Strategy (which includes a GHG emissions element as well as supporting new technologies, but no federal carbon tax) which could be a key component of the budget in February 2009 and act as the lead-up to Election Campaign Fall ’09.

I’m certain that PM Harper can’t believe his good luck. Dion has just handed him a priceless gift.
Brian Smith

Stephan Dion says that his green shift is revenue neutral and all carbon taxes will be given back to the taxpayer in the form of tax relief.

My question is this. The Liberals do not plan to put a carbon tax on gasoline for the first four years since there is already an excise tax on gasoline. After that they say the excise tax will be merged into the carbon tax. Does his tax rebate plan now mean that he plans to give back the gasoline tax to consumers as a tax rebate? Even if this only happens after year 4 when it stops being called an excise tax and starts being merged in with the carbon tax my point is the same.

Both the Martin government and Harper government promised that money form the gasoline excise tax would go to pay for needed improvements to transportation infrastructure. Under Dion’s plan this money would no longer be available. What does Dion say about this? What do the big city mayors who are depending on that money say about this?