40th Canadian Federal Election - Welcome to another Conservative Minority (whee!)

[Slava]

Originally Posted by Bend it like Bourgeois

Both policies together are part of a market. If they authors meant simply insititute a tax on one part of the economy they probably would have said that. I guess we simply disagree on what a market approach is.



Isn't the idea that consumers will not feel the pain? Gas prices, heating prices, transport prices will not go up thanks to reductions in fuel tax? Or do I have that wrong?

Imagine a cigarette tax that taxed manufacturers but promised a pack of smokes would cost the same thing. Would that be considered anything other than a tax on the manufacturers? Would anyone think it would reduce the amount of cigarette sales?

Maybe I'm just too cynical. But when the libs themselves call this a social spending initiaitve, when I haven't heard emissions reduction targets or stated goals other than to tax and spend, and when the majority of the costs are paid where they won't get votes anyway, I smell politics, not policy.

I see your sentiments here and don't totally disagree. But the reason that gas prices wouldn't rise under this plan is because the current gasoline taxes are part of this plan; there is no increase.

[Bend it like Bourgeois]

Originally Posted by Slava

I see your sentiments here and don't totally disagree. But the reason that gas prices wouldn't rise under this plan is because the current gasoline taxes are part of this plan; there is no increase.

I'm not sure I understand.

If the cost of a litre of gas goes up...whatever, say 10%. Does the price at the pump go up 10%?

[Ronald Pagan]

Originally Posted by Bend it like Bourgeois

I'm not sure I understand.

If the cost of a litre of gas goes up...whatever, say 10%. Does the price at the pump go up 10%?

It depends on the elasticities of demand and supply how much the tax is passed down to the consumer. In the case of gas, where demand is relatively inelastic, most of the tax incidence will be passed onto the consumer.

[Cowboy89]

Originally Posted by MarchHare

excess government revenue should only be used to pay down the debt.

I can fully agree with you on that one. This BS of the PM being Santa Claus every fiscal year end to blow 'excess government revenue' on vote buying schemes is irresponsible. If there's money left over after expenditures then it should be completely used for debt repayment. Both Liberals and Conservatives are guilty of this recently.

[Flames in 07]

Originally Posted by Ronald Pagan

It depends on the elasticities of demand and supply how much the tax is passed down to the consumer. In the case of gas, where demand is relatively inelastic, most of the tax incidence will be passed onto the consumer.

ALL of the tax will be passed on, because of the demand elasticity.

[Resolute 14]

Originally Posted by Ronald Pagan

Because a tax internalizes the costs of environmental pollution. Emitters will then seek out opportunities to minimize their costs. A cap and trade does the exact same thing just in a different way. Both policies are quintessential market mechanisms.

Well that's an interesting way of looking at things.

A more accurate way would be that emitters will seek out opportunities to maximize profits. They don't necessarily care about costs. Double the cost, but triple the revenue, every business in the world will do that without hesitating.

Emitters will pass the costs on to consumers immediately. If they still buy it, nothing changes. The only possible way the carbon scam works is if the consumer refuses to buy the product.

It's economy wide because all sectors of the economy are subject to the tax as apposed to a cap and trade system that focuses on large emitters.

Liberal brainwashing. We all know who the focus of the Dion's scam is.

It is passed along, through the tax...

So much for nobody "getting left behind", in Liberal words....

Gas subsidies in Ontario so that they can keep producing SUVs?

LOL wut?

Here I agree with you. The Green Shaft is a bribe for Quebec. Ontario not so much.

[Devils'Advocate]

Originally Posted by Resolute 14

Emitters will pass the costs on to consumers immediately. If they still buy it, nothing changes. The only possible way the carbon scam works is if the consumer refuses to buy the product.

But therein lies the rub. Remember those funky supply and demand charts we did in grade 8 economics classes? Business are ALREADY charging us the MAXIMUM that they can charge us without losing business. My aunt makes these really neat looking Christmas ornaments out of styrofoam nuts and pipe cleaners. She charges $2 per ornament because that's the point at which she can sell them. Not because she could sell them for $5 and she's a nice person. If the cost of pipecleaners went up, she still can't "pass that on to the consumer" because if she charges $3 per ornament, she won't sell nearly as many. She would have to find a way to cut down on the pipe cleaners and perhaps use half a pipe cleaner for the ornament whereas she used to use a whole pipe cleaner. Somehow, someway, she has to keep the cost down.

Liberal brainwashing. We all know who the focus of the Dion's scam is.

No, "we" don't all know who the focus is, because "we" don't all think it is a scam at all. But hey, if we disagree with you, we MUST be brainwashed. Nice.



-=-=-=-=-=-

As for the "no goals in place, therefore it must be a scam".... I'm on a diet. I've cut out all the crap junk food and pizza only once a week. Getting more exercise too. I have no end goal weight that I would like to reach. Since I don't have a target weight, I must not really be all that interested in losing weight and I'm really cutting down on the junk food to save money that I can use for hookers and blow.

[Flames in 07]

Originally Posted by Devils'Advocate

But therein lies the rub. Remember those funky supply and demand charts we did in grade 8 economics classes? Business are ALREADY charging us the MAXIMUM that they can charge us without losing business. My aunt makes these really neat looking Christmas ornaments out of styrofoam nuts and pipe cleaners. She charges $2 per ornament because that's the point at which she can sell them. Not because she could sell them for $5 and she's a nice person. If the cost of pipecleaners went up, she still can't "pass that on to the consumer" because if she charges $3 per ornament, she won't sell nearly as many. She would have to find a way to cut down on the pipe cleaners and perhaps use half a pipe cleaner for the ornament whereas she used to use a whole pipe cleaner. Somehow, someway, she has to keep the cost down.

No rub.

I took several economic courses and what I can tell you with zero doubt is that in this case if the cost structure changes for everyone, every ounce of that cost will go to consumers.

The flaw in your thoughts is that they are changing at the level they can make a profit AND justify their expenditure in the first place.

If they can't make the return they want to, they will invest somewhere else.

If say the industry has a $1.00 / l gasoline production cost levied on it ... they would decide a) how much can be passed on, if they can't pass on a level that allows them to justify investment, they will move the capital around and invest somewhere else.

[jolinar of malkshor]

Originally Posted by Devils'Advocate

But therein lies the rub. Remember those funky supply and demand charts we did in grade 8 economics classes? Business are ALREADY charging us the MAXIMUM that they can charge us without losing business. My aunt makes these really neat looking Christmas ornaments out of styrofoam nuts and pipe cleaners. She charges $2 per ornament because that's the point at which she can sell them. Not because she could sell them for $5 and she's a nice person. If the cost of pipecleaners went up, she still can't "pass that on to the consumer" because if she charges $3 per ornament, she won't sell nearly as many. She would have to find a way to cut down on the pipe cleaners and perhaps use half a pipe cleaner for the ornament whereas she used to use a whole pipe cleaner. Somehow, someway, she has to keep the cost down.

Ah.....maybe it is just me but, I think styrofroam ornaments may not be on the same scale of nessesity as say gasoline and heating oil.

As for the "no goals in place, therefore it must be a scam".... I'm on a diet. I've cut out all the crap junk food and pizza only once a week. Getting more exercise too. I have no end goal weight that I would like to reach. Since I don't have a target weight, I must not really be all that interested in losing weight and I'm really cutting down on the junk food to save money that I can use for hookers and blow.

Come on. Something this serious and involving this much money you need to have targets and goals. Otherwise how do you determine success? I don't think anyone doubts that the Liberals want to reduce green house gasses and make the planet a better place, that is not what the issue is. If there are no targets and goals and the Liberals plan does reduce these greenhouse gasses by 1%. What does that mean? Was it worth doing it for 1%? You need to be able to have something to gauge the success.

[Ronald Pagan]

I hope you feel good after that ill-informed, if not patently false, rant.

Some points of clarification:

A more accurate way would be that emitters will seek out opportunities to maximize profits. They don't necessarily care about costs. Double the cost, but triple the revenue, every business in the world will do that without hesitating.

6to1 half dozen of the other. Your way of stating things isn't 'more accurate' infact it's a more obtuse and flawed way to say minimizing costs. Maximizing profits is inherently an activity of minimizing costs. Why? Because in a competitive market, firms cannot set prices for the goods they sell, they can control the costs of factors of production which will return the highest margins.

Emitters will pass the costs on to consumers immediately. If they still buy it, nothing changes. The only possible way the carbon scam works is if the consumer refuses to buy the product.

Not necessarily. Where there are no substitutes for less carbon intensive goods and demand is quite inelastic then yes most of the costs will be passed onto the consumer. (this is not necessarily a bad thing either from an environmental perspective because it means that these goods will be consumed less with higher prices and emissions to make the goods should reduce)

But, in a market where there are substitutable goods that are more or less carbon intense and where the market is competitive then all of the costs will not be passed onto the consumer.

Liberal brainwashing. We all know who the focus of the Dion's scam is.

Seriously? You seriously can't look more ill-informed and partisan with this kind of garbage.

To reiterate my point, a carbon tax that's applied on all primary fossil fuels is economy-wide. I don't know what definition you have of economy wide but mine is that the tax incidence is spread to the entire economy. If you tax all primary fossil fuels (crude oil, natural gas, coal, coke, and imported fossil fuels) then there isn't a good that's produced in Canada that isn't subject to the tax and there isn't a person who uses fossil fuels for energy that isn't subject to teh tax.

I don't know how else to explain it. If you can't understand that then I seriously overestimated your ability to participate in this debate.

Here I agree with you. The Green Shaft is a bribe for Quebec. Ontario not so much.

Larf, yep. It's all Quebec...

You coudn't sound more cliched-Albertan.

Keep it up. Good for a laugh.

[Cube Inmate]

Originally Posted by Devils'Advocate

But therein lies the rub. Remember those funky supply and demand charts we did in grade 8 economics classes? Business are ALREADY charging us the MAXIMUM that they can charge us without losing business....

So, then, explain to me why we're paying $1.20/L for gas today when the gas vendors proved only a week or two ago that they can charge $1.39/L and people would still buy? Explain why "petrol" costs twice as much in the UK yet people still pay for it?

I don't need explanations...I only felt like saying that you've attempted to over-simplify things and used the classic technique of presenting it as something that "we all learned in Grade 8." It only works if nobody calls you on it, so there you go.

[Ronald Pagan]

Originally Posted by Cube Inmate

So, then, explain to me why we're paying $1.20/L for gas today when the gas vendors proved only a week or two ago that they can charge $1.39/L and people would still buy? Explain why "petrol" costs twice as much in the UK yet people still pay for it?

I don't need explanations...I only felt like saying that you've attempted to over-simplify things and used the classic technique of presenting it as something that "we all learned in Grade 8." It only works if nobody calls you on it, so there you go.

If your point is that demand for gasoline is inelastic then I would disagree:

http://www.econbrowser.com/archives/...ne_demand.html

As you can see from that chart, higher prices have led to lower consumption has dictated by economic theory.

So yes, there is so slack in demand for gas, and it's exactly what a carbon tax or cap and trade system intends to exploit.

[Flames in 07]

Originally Posted by Ronald Pagan

You coudn't sound more cliched-Albertan.

Don't feed the trolls.

[Moderator]

Please keep the discussion on topic and leave out the insults (backhanded or otherwise), it's been a decent thread so far and it'd be a shame to have to lock it.

[Bend it like Bourgeois]

Originally Posted by Ronald Pagan

It depends on the elasticities of demand and supply how much the tax is passed down to the consumer. In the case of gas, where demand is relatively inelastic, most of the tax incidence will be passed onto the consumer.

I get the economics. It's the Liberal-nomics I don't get. I don't mean that to be a shot, everyone has spin. I'm just trying to get through it.

The discussion and positioning in the east when I was there was that the green shift will not cause gas prices, or really any prices to rise. It will simply transfer money from big oil and the west to fund programs and spending.

Generally the eastern media is no friend of Harpers and often a big friend of the libs. So maybe this is their spin, not the party's position.

[flamefan74]

So I have a question.

In Dion's Green Shift he wants to increase the tax on diesel by $.07/liter (which makes it great that I bought a more fuel efficient diesel car ), but not on regular gasoline as he says it is already taxed at $.10/liter which is equivalent to $42/ton in his carbon tax. Is he talking about the excise tax on gasoline that goes to general coffers? If so, what are the chances he will put that money into the income tax cuts that we are supposed to get? And if he is, what about the $.04/liter excise tax on diesel that is already in place. Will this be added too?

My guess is that he won't. And he won't put a carbon tax on gas like he would diesel because that would really kill his popularity. Considering all the money he is spending, he will need that excise tax to fund his programs. (As per the government website, it states that the government in 2006 put over $5 billion into it's coffers from excise taxes. $4 billion from gasoline and $1 billion from diesel.)

[Dan02]

Originally Posted by Ronald Pagan

If your point is that demand for gasoline is inelastic then I would disagree:

It might not be perfectly inelastic but it's definately relatively inelastic. The big drop in your graph only shows a 10% drop from peak and about 5% drop from average. And wouldn't that graph make more sense for analyzing elasticity if that was price vs demand rather then demand over 2 different years?

Be interesting to see a graph of Canadian demand as in the last few years the price of gas has almost doubled yet i don't think demand has changed much.

[PowerPlayoffs06]

I don't want to delve into the debates, but I have a question:

If my district has no candidate running for the party that I want to vote for, does that mean I'm S.O.L. for voting?

I'm just going by who this site has listed: http://www.nodice.ca/elections/canad...gs-alberta.php

[Ronald Pagan]

Originally Posted by Dan02

It might not be perfectly inelastic but it's definately relatively inelastic. The big drop in your graph only shows a 10% drop from peak and about 5% drop from average. And wouldn't that graph make more sense for analyzing elasticity if that was price vs demand rather then demand over 2 different years?

Be interesting to see a graph of Canadian demand as in the last few years the price of gas has almost doubled yet i don't think demand has changed much.

I agree with you that demand for transport fuels, specifically gasoline, is inelastic... in the short-run.

However, over the medium to long-run, demand should be elastic as people make decisions that will limit their consumption of gas if the price is high enough. For example, people will replace their cars after their current car has expired with an efficient vehicle, people will choose their homes closer to their work or on transit lines, and people will daisy chain their errands to make less car trips.

The evidence from Europe over the 90s and 2000s is that higher gas prices have, infact, led to less consumption.

But I would agree, right now demand is inelastic but not totally inelastic as we have seen that Americans drove less kms over this summer than last and total consumption of gas dropped (I think) in the wake of high gas prices.

[Resolute 14]

Originally Posted by Ronald Pagan

You coudn't sound more cliched-Albertan.

Those who forget history are doomed to repeat it.

When the Liberals start to show that Alberta is more than just a convienent place to dump the costs of their Central Canadian policies, my opinion will change. The burden is on them to prove me they changed, not on me to assume Canada finally extends west of Thunder Bay in their world.

Notwithstanding the fact that even if you dismiss my arguments as little more than stereotypical ranting, there are more than enough arguments against Dion's scam.

Why Green Shift just won't work

The Green Shift would fundamentally alter the tax system with unpredictable results to accomplish what the market is already delivering, which is sharply higher carbon prices. The Liberals' own numbers remind us that the price of home heating oil has gone up 71.4 per cent since the beginning of 2006. If that isn't enough to get people to use less, what would be?



With the Green Shift, the Liberals are running to jump on the caboose while pretending that they are driving the train. This is a cumbersome policy of limited value. No wonder Dion is talking about it less and less.

Dion downshifts on the Green Shift

So why, if the plan is so lucrative, are the Liberals offering $900 million more in "incentives and rebates"? And why, if I'm so much better well off, would I cut back on my heat or gasoline bill? For $1,172 I could put a down payment on a Hummer.

Is there something here they're not telling us?

'Green Shift’ Impact Analysis For Ontario Business

TORONTO: The Canadian Taxpayers Federation (CTF) today released an impact analysis for Ontario businesses that would result from the implementation of the Liberal Party of Canada’s proposed “Green Shift” carbon tax endorsed by Premier McGuinty. Ontario Director, Kevin Gaudet said “the Liberal carbon tax will cause a massive increase to the cost of power alone. Adding net new costs of $1.5 billion for power in Ontario will further damage an already struggling economy. Mr. McGuinty should withdraw his support of this tax scheme.”

Dion goes on offensive with his Green Shift plan

This is one of my favourites. Aside from the typical Liberal vs. Conservative rhetoric, we have Dion trying to argue that the Conservative environmental plans are a threat to national unity, while theirs is not. Umm, wha?

Green Shift doesn't discriminate

The Liberal finance critic takes aim at an editorial by the National Post that claims Alberta and Saskatchewan families will end up paying 5 times what the rest of the country will. Having not read the original editorial, I can't really take umbarage with McCallum's rebuttal, but this was interesting:

If, at one extreme, producers pass all of the carbon tax on to consumers, then the 40% figure is irrelevant. In terms of who pays the tax, it matters not who emits -- it matters only who consumes. And consumption patterns on the Prairies are not radically different from the rest of Canada.
If, at the other extreme, producers pass none of the carbon tax on to consumers, then it becomes true that the owners of emitting companies based in Saskatchewan and Alberta pay 40% of the tax. But that's vastly different from saying that families in these provinces pay 40% of the tax, given that very substantial numbers of these owners are based in other provinces and countries.

Two things really lept out at me when reading McCallum's responses.

1. All he talks about are taxes, taxes, taxes, taxes, taxes, taxes. Oh, and one tiny statement about "changing behaviours" tucked at the back.

2. He presents two alternatives in his rebuttal. Either producers pass the costs on, which liberals such as you, Mr. Pagan, argue wont happen. Or producers eat the costs. Given that 40% of said production is in Alberta and Saskatchewan, guess where the prime impact of said costs will land? In Alberta and Saskatchewan. Not necessarily with an increased tax burden for the people of this province, but certainly with a reduced economy. And with it, job losses, revenue losses, and all of the other associated hardships.

Some choice.

Those are, of course, the extremes. The reality will be in the middle, a mixture of increased costs to consumers, and a reduced economy.

Three Questions on Green Shift Plan

I can't vouch for the legitimacy of the site itself, and yes, the numbers are really pulled out of this person's behind, but she does make a really interesting point on how the carbon scam clearly is not "revenue neutral". Certainly not for consumers, but also not for government. Mainly because the Liberals haven't accounted for the additional revenue they will collect via the GST when costs get passed onto consumers. This person estimates it to be as much as $775 million-$1 billion a year.

Dion Green Shift a Green Shaft

One equation his numeric wizardry forgot to include: Other levels of governments will be impacted by his new tax. And, like energy giants, they'll pass extra costs onto the taxpaying consumers.
In B.C., where Premier Gordon Campbell's new carbon tax hits on Canada Day (doesn't that underscore the slogan Tax Me, I'm Canadian?), municipalities are already warning they'll have no choice but to hike property taxes. Other fees and taxes could also head higher.
NO-BRAINER
B.C.'s Liberal tax grab is expected to collect $1.85 billion over the next three years, with businesses paying 70% of the burden, while getting only 30% in tax cuts. It's a no-brainer the costs of goods and services will head higher -- which is why new polls show a majority of British Columbians "strongly oppose" the new tax, which pushes up the price of B.C. gas, already at $1.45 a litre, by 2.4 cents on July 1.