By Aaron Wherry - Wednesday, November 28, 2012 - 0 Comments
As a result of the greenhouse gas emissions regulations announced yesterday, the purchase price of cars will increase.
Officials estimated the cost of an average car would climb by $700 in 2021 and by $1,800 by 2025 when the rules would be fully phased in, though some industry analysts say the price tag could be as much as $5,200 per vehicle depending on the technology needed to achieve the efficiency gains. But Canadian officials also say the motorists would save $900 annually in fuel costs at today’s gasoline prices…
The Center for Automotive Research , an auto industry think-tank based in Ann Arbor, Mich., estimates the cost of the average new vehicle will rise by $5,200 in 2012 dollars as auto makers add expensive new technologies to meet the higher miles per gallon standard. “The [auto makers’] research and development departments tell us the true cost is more like $10,000 per vehicle by 2025,” Sean McAlinden, CAR’s executive vice-president of research and chief economist said Tuesday.
The new regulations follow current regulations that will also increase the purchase price. The Canadian regulations are modelled on the American regulations, which Eduardo Porter questioned in September.
What the government didn’t mention is that these improvements come at a high cost for drivers, automakers and society in general. They could be achieved much more cheaply by raising taxes on gasoline to a level comparable to that of pretty much every other industrialized nation. The new mileage rules are so expensive, in fact, that even if one factors in all the expected gains from the policy — like less damage from climate change and fewer deaths from respiratory disease — many economists think that the costs actually outweigh the benefits.
The reason is fairly straightforward. Fuel-efficiency standards do not really change drivers’ behavior in a helpful way. Gas taxes do. Consider how a gas tax would work. Because it would make gas more expensive at the pump, we would drive less. When time came to replace the old family S.U.V., we would be more likely to consider a more fuel-efficient option. As more Americans sought gas-sipping hybrids, carmakers would develop more efficient vehicles.
Peter Kent’s speech yesterday announcing the changes is here.
By John Geddes - Thursday, November 22, 2012 at 3:03 PM - 0 Comments
With many federal departments quietly coping with budget cuts (as we’re reminded by the Parliamentary Budget Officer going to court to try to find out more about exactly how they’re managing it), the possibility of new infrastructure spending offers a rare whiff of fresh money in the air around Parliament Hill.
This week the Federation of Canadian Municipalities is holding what it calls its “advocacy days” (i.e., lobbying days) here, bringing more than 100 politicians from cities and towns to Ottawa to “build relationships” (i.e., apply pressure) with federal politicians and bureaucrats.
By Aaron Wherry - Tuesday, October 25, 2011 at 11:30 AM - 1 Comment
The NDP leadership candidate has announced the broad points of his urban agenda.
Dewar committed to ensuring a seat at the table for municipalities in federal-provincial/territorial negotiations dealing with their interests. He also committed to guaranteeing an additional cent of the existing gas tax to provide municipalities with stable, long-term infrastructure funding.
The federal government currently transfers $2 billion in gas tax revenues to municipalities. An additional cent of the gas tax would equal, by the Dewar campaign’s estimate, another $500 million. But the gas tax promise was included in the last NDP election platform, so this might not differentiate Mr. Dewar in any particular way.
By Aaron Wherry - Thursday, February 10, 2011 at 9:03 AM - 21 Comments
The Conservatives may or may not allow gas tax revenues to be used to build a hockey arena in Quebec City, but the mayor of Quebec City isn’t open to using the city’s gas tax funding to build that arena and he and Quebec Premier Jean Charest are now ready to go ahead without the federal government’s involvement. Regardless, the mayor of Edmonton is upset, the city of St. Catharines is interested and the city of Regina is befuddled.
Chuck McDonald, director of finance for the City of Regina, said out of the $10.66 million in gas tax received for 2011, $4 million will go to bridge renewal, $1.18 million is for street renewal, $3.66 is for new buses and $1.82 million is for the new landfill. Such spending is typical for the gas tax dollars.
“If I understand correctly and they would designate that facilities would be eligible, it really is a question of robbing Peter to pay Paul, because if we were to dedicate it to a facility, it means we’d have to find other funding for street infrastructure or the fleet. The pie stays the same size,” McDonald said. ”It would provide more flexibility, but we’ve got our core things that we have to invest in. We would have to find funding somewhere else for these things.”
By Andrew Coyne - Tuesday, January 11, 2011 at 9:20 AM - 217 Comments
Our rush hours rank with the world’s worst. Andrew Coyne has the solution.
Day breaks over Canada, and across the country, the morning commuter rises, dresses, hops into his car and is transformed into . . . traffic. Immobilizing, enervating, infuriating traffic, glaciers of metal improbably forcing their way down the nation’s roads each morning, only to have to force their way back up the same roads later in the day.
In Halifax, drivers seethe as they inch through the Armdale Rotary. In Montreal, it’s the seemingly hours-long grind along the infamous Autoroute Décarie. Toronto commuters visibly age waiting for something to move on the “Don Valley Parking Lot.” Calgarians have ample time each day to regret taking Deerfoot Trail, while in the Lower Mainland of B.C., drivers debate which is worse: the bottleneck on the Port Mann bridge or the eternal stretches of Highway 1 on either side of it.
By Aaron Wherry - Tuesday, February 16, 2010 at 3:06 PM - 22 Comments
The NDP files its suggestions with the Finance Minister, including pension reform, EI reform, municipal funding, an extension to the home renovation tax credit and a repeal of planned corporate tax cuts.
In addition to job creation measures, the Government must address the looming structural deficit, as identified by Parliamentary Budget Officer Kevin Page. The deficit was caused, in part, by previous reckless reductions in corporate income tax rates. Like most Canadians, New Democrats recognize that in the long term, we cannot spend more than we collect. Yet your government has not only attempted to deny the existence of the structural deficit, it has aggravated the imbalance by reducing revenues despite the absence of any evidence that those tax savings have led to investments in jobs for Canadians. Your unbalanced corporate tax policy is exacerbating our overreliance on oil extraction, and contributing to a high dollar, which in turn hampers job creation and exports in the value-added sectors of manufacturing, forestry, aerospace and others. We propose that you announce the government will not proceed with additional cuts to the corporate tax rate in 2011 and 2012.
By Andrew Coyne - Friday, May 9, 2008 at 12:19 AM - 0 Comments
More than 200 leading economists have signed a petition denouncing Hillary Clinton and John…
More than 200 leading economists have signed a petition denouncing Hillary Clinton and John McCain’s proposal for a gas tax “holiday” during the summer months, reasoning — correctly — that the scheme would discourage conservation and widen the deficit, while doing little for those it purports to help. Hillary’s response:
Well I’ll tell you what, I’m not going to put my lot in with economists. We’ve got to get out of this mindset, where somehow, elite opinion is always on the side of doing things that really disadvantage the vast majority of Americans.
The statement is noteworthy in two respects. One, it elevates mere pandering to the level of metapandering — pandering about pandering. Charged with pandering to voters’ pocketbooks, she responds by pandering to their anti-intellectualism: “economists … elite opinion…”
Two, it illustrates the uniquely precarious position of economists, and economics, in the popular imagination. Imagine! “Well I’ll tell you what, I’m not going to put my lot in with doctors when it comes to decisions about medical treatment.” Or: “We’ve got to get out of this mindset, where somehow we rely on physicists to tell us about quantum mechanics.” Economics is the only profession where people who have never studied the subject, never read any of its major works, never so much as thought about it, nevertheless feel entitled to dismiss two centuries of the most rigorous intellectual spadework — not for nothing is economics known as the queen of the social sciences — with a wave of their hands.
There are few subjects where it would seem more important to listen to expert opinion than economics, touching as it does so directly on bread-and-butter questions of the public interest. Yet because it is so intimately bound up in everyday matters, people feel uniquely entitled to substitute their own opinions for those who actually know something about the subject.
Not that it’s helped her any. Perhaps the overall impression, that she will say anything and do anything to get her hands on power, no matter how nonsensical or self-contradictory, is what did her in, in the end. “However lucky Error may be for a time, Truth keeps the bank, and wins in the long run.” The man who wrote that, I need hardly add, was an economist.