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Glen’s $8 Billion Boondoggle

Between 2017 and 2020, the cap and trade system that Glen Murray loves will cost Ontarians — $8 Billion. That is about $600 per person.glen_murray_cropped

That’s great. That is about one tenth of the subsidy Ontarians get for burning fossil fuels. I am very much in favour of taking back the subsidy.

But what shall we do with the $8 Billion? Give it to companies? Let Glen spend it? Or give it back to Ontarians?

My view is that we give it back. The cap and trade system is just a tax on consumers. Consumers use the fuel, and no matter what anyone says, the fuel suppliers will pass the cost on to consumers. Any company that uses fuel will pass the cost on to consumers. You have to be a bit stupid to think otherwise.

So give the tax money back to consumers. The goal is not to make people poorer, the goal is to make them better off by reducing the very dangerous effects of climate change. The government does not need to keep that tax revenue to fight climate change. In fact the government gets a double impact by giving the money back to consumers.

Some people will definitely cut back on fuel use with the tax but they will also spend some of their $200 per year buying lower carbon goods. Low-carbon products will be cheaper than high carbon goods with the carbon tax on fuels.

Glen argues that he has to keep his carbon tax revenues because he needs to spend them on mitigation measures. It isn’t clear that Glen is actually better at mitigation than the rest of the population, but it is clear that he does not need to use carbon taxes for these programs.

Any program that cuts emissions efficiently actually has the potential to make money: home insulation pays for itself; solar panels will soon pay for themselves. Wind power turbines in remote communities will pay for themselves. Since these are good investments, all the government has to do is lend money to people who want to save money. Lending money is cheap and, at least for banks, very profitable.

To get businesses to cut their emission just tell them that the tax will be very high very soon. Don’t do what Glen has been doing, telling people that gas prices will not rise much. That is counter productive. Are you going to buy an economy car if the Minister of the Environment is promising to keep fuel prices low? People buy bigger vehicles when fuel prices are low. Glen is actually promising exactly the wrong thing. He is undermining the Provincial program!!

To get people to accept high enough fuel prices you just have to give them their money back.

The Ministry estimates that Ontario households are expected to incur additional costs for fuel, such as gasoline and natural gas, of $156 in 2017 and about $210 by 2019, and also additional yearly indirect costs on goods and services of $75 in 2019.


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