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

[Slava]

^ Res, first let me say that is a great post. You've obviously done a lot of digging here and I will admit that I haven't had a chance to review each of these links!

That being said, it looks like the thing missing from the equation here is the tax cuts that are embedded into the program. No one is arguing that there won't be some increased cost for consumers...I think that speaks for itself in the program. The plan does call for enormous tax reductions however to offset these costs.

This also forms the main reason that Albertans are not shafted with this plan; the increased costs are spread through out the country (from the emitters), and everyone across the country uses virtually the same amount of energy, and all get the same tax breaks as well.

[Cowboy89]

Originally Posted by Slava

^ Res, first let me say that is a great post. You've obviously done a lot of digging here and I will admit that I haven't had a chance to review each of these links!

That being said, it looks like the thing missing from the equation here is the tax cuts that are embedded into the program. No one is arguing that there won't be some increased cost for consumers...I think that speaks for itself in the program. The plan does call for enormous tax reductions however to offset these costs.

This also forms the main reason that Albertans are not shafted with this plan; the increased costs are spread through out the country (from the emitters), and everyone across the country uses virtually the same amount of energy, and all get the same tax breaks as well.

Tax cuts will not offset the lower income that people will be making in this province after the carbon tax lowers netbacks at many of our province's employers who provide high income jobs. The corporate tax breaks will do nothing for emerging companies that do not pay tax as they do not make taxible income yet. The carbon tax proposal does nothing to help them because they will have a higher cost base without any 'savings'. Just like a balanced budget in of itself doesn't necessarily indicate the best use of capital (as you can have a high taxing and high spending regime), a "revenue neutral" tax doesn't necessarily mean the net effect on people will be zero or even close to it. Ultimately what it will work out to is less income, higher costs, but we get a token tax savings that doesn't make up the difference of both.

[Slava]

Originally Posted by Cowboy89

Tax cuts will not offset the lower income that people will be making in this province after the carbon tax lowers netbacks at many of our province's employers who provide high income jobs. The corporate tax breaks will do nothing for emerging companies that do not pay tax as they do not make taxible income yet. The carbon tax proposal does nothing to help them because they will have a higher cost base without any 'savings'. Just like a balanced budget in of itself doesn't necessarily indicate the best use of capital (as you can have a high taxing and high spending regime), a "revenue neutral" tax doesn't necessarily mean the net effect on people will be zero or even close to it. Ultimately what it will work out to is less income, higher costs, but we get a token tax savings that doesn't make up the difference of both.

Maybe I'm missing the point here, but now it seems like the argument is the other side of the coin from the initial argument? You can't argue it both ways really; either the corporations are passing along the taxes (which everyone thinks that they will), or the corporations will not make enough money. If the corporations pass this along to consumers then really there is no hit to their income to begin with, and coupled with the lower taxes their income actually rises!

As far as small/emerging corporations, they are always facing the reality of not enough income to meet operating expenses. Its a peril of the markets.

[Kerplunk]

Originally Posted by Ronald Pagan

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

Could it have also been improving technology that contributes to less consumption? I don't think its right to say that higher prices led to less consumption without evaluating other factors at the same time that might have also reduced it, and at what percentage. A 10 to 20 year span can introduce a lot of changes.

You might have a better case if you used the reduction of gas subsidies in China as an example, but I haven't found any consumption numbers pre-and-post decrease.

[CaptainCrunch]

Its not as easy to say that people will or can change due to the carbon tax, telling people to buy new cars, or move closer to work, or change their electricity is fine for people that can afford to do it. But the lower and lower to middle class can't go out and buy a shiny new car with better ecological design, they can't necessarily afford to sell their house, or pay a new damage deposit to move closer to work.

The one thing that continually strikes me with this is the ripple through all of the corporate sectors. Anyone who gets taxed is not simply going absorb the tax, they're going to pass it on to the producers, and even if they do get the tax break at the end of the year, they're still going to want to cover their up front costs. And its going to ripple right through like a pyramid. Energy producers are going to increase their prices, then the manufacturers or food producers or anyone that uses power are going to increase their prices, plus they're going to get taxed as well, and they're going to pass it on to the producers.

Plus Dion announced yesterday that foreign owned companies or investors are going to bear the brunt of the costs as well, so they're not going to invest in Canada because its cheaper to invest in China or India or anywhere else.

Plus you know that the Liberals are going to create carbon exemptions for companies in Ontario and Quebec because they don't want to lose jobs in voter rich areas so the Energy sector out here is going to be taxed.

Again if you want to make these green shift changes, then you do it without it being punative. You give incentives for people who normally buy used cars because they can buy new cars to buy those new cars. You give tax breaks without taxation to organizations that go green, you give tax breaks to home builders who go green. You encourage univesities to create courses based around these so called green collar jobs so that these students enter the job market and can pay taxes based around a green economy.

But Dion's system which has no real targets or incentive to change since their nothing stopping these companies from charging more to recover the tax to me is merely a taxation shift to buy votes elsewhere in the country, while at the same time butchering the golden goose in the provinces in Canada that are already paying equalization to the other provinces.

[Thunderball]

Originally Posted by Ronald Pagan

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.

Its important to note the environmental distinctions between Canada, the US and Europe.

Europe has a vast, comprehensive and efficient transit line that makes most Canadian and American systems look like a joke. The average European country can also fit into the Province of Alberta, which aids in distance efficiency and intercity traffic. The average European country also has a more hospitable winter climate, which aids in people's ability to spend more time outside, rather than go from car to office to car to home. Therefore, it is reasonable to conclude that Europeans would have a lower threshold to lower their fuel consumption than Canadians and Americans.

Fuel demand in Canada is more akin to alcohol... people will pay anything up to a very extreme level... that I would guess would be in the $2.50-$3/L range. Canada and most of the US would be utter bedlam if people began to abandon their cars for transit in large numbers. The systems are simply too poorly designed and overburdened as it is.

[Resolute 14]

Originally Posted by Slava

^ Res, first let me say that is a great post. You've obviously done a lot of digging here and I will admit that I haven't had a chance to review each of these links!

That being said, it looks like the thing missing from the equation here is the tax cuts that are embedded into the program. No one is arguing that there won't be some increased cost for consumers...I think that speaks for itself in the program. The plan does call for enormous tax reductions however to offset these costs.

Indeed, Dion does add tax cuts. The general theme of many of the articles is that the cuts themselves wont remotely cover the increased costs. The CTF link for Ontario says that the province's 111 power generation facilities will be eating $1.5 billion in additional costs per year. The 1% business tax cut Dion proposes would total $800 million for the entire province. Not just the 111 power generation facilities, but for the 360,000 business registered in the province according to StatsCan.

There are a lot of zeros attached to the increased tax burden these power generation facilities will have to bear. That burden will be passed down.

This also forms the main reason that Albertans are not shafted with this plan; the increased costs are spread through out the country (from the emitters), and everyone across the country uses virtually the same amount of energy, and all get the same tax breaks as well.

Indeed. The consumers consume at similar levels. The emitters, however, are highly centralized. It is the consumers of Alberta and Saskatchewan that make up the workforce of 40% of said emitters. They are the ones that are going to take a disproportionate hit of the economic costs Dion's plan will create.

[calculoso]

Originally Posted by Slava

That being said, it looks like the thing missing from the equation here is the tax cuts that are embedded into the program. No one is arguing that there won't be some increased cost for consumers...I think that speaks for itself in the program. The plan does call for enormous tax reductions however to offset these costs.

With all of the spending announcements, the reduction in the "Income Trust Tax", the targeted carbon tax impact reduction programs, the cost of bureaucracy to implement and tract the tax, etc, I have a tough time believing that the other tax reductions will actually amount to much.

[octothorp]

One of the bizarre trends in the polling in this election is NDP in Quebec. This is a party that got 4.6% of the vote in 2004, and 7.5% in 2006. Most recent polls from Ekox, Nanos, and Harris all show them polling between 16% and 19%. That's a huge spike. Anyone want to suggest reasons why? I'm at a loss to explain it. Has there ever been an established NDP base in Quebec? Has Layton made any crazy promises to Quebec in this election cycle?

[Slava]

Octo, the main reason is the fall of the BQ. The policies of the BQ and NDP are similar in most regards and with that force falling out of favour the NDP are kind of the natural place for those voters to gravitate to. Layton has also been pushing to make inroads there, calling Montreal his home and actually having a few higher profile candidates.

[octothorp]

Originally Posted by Slava

Octo, the main reason is the fall of the BQ. The policies of the BQ and NDP are similar in most regards and with that force falling out of favour the NDP are kind of the natural place for those voters to gravitate to. Layton has also been pushing to make inroads there, calling Montreal his home and actually having a few higher profile candidates.

It`ll be really interesting to see how that plays out. When you look into the ideologies, they really do seem like a good fit with Quebec, and there`s always been a willingness in Quebec to go with the third party, whether it`s Bloc or going back to the So Cred days. And now that into it, Layton has sort of been quietly courting Quebec over the last few years.

If they draw off the Bloc vote, this ultimately helps the Liberals more than the Conservatives, because the Liberals had more 'close second' finishes in Quebec than the Conservatives did. But you'd think that any rise in NDP support would also draw votes away from the Liberals, too. Personally, I don't expect either the Tories or Liberals to lose many seats in Quebec; the question is who gets those Bloc seats as their support dwindles.

[ikaris]

About the thought of the green shift/carbon tax whatever you want to call it... To those who say that the energy producers will just shift the cost to the consumers, how is that even possible?

If you are competing in a global market where the price of oil is relative to fluctuations seen that are beyond our specific control, if we as a country implement a tax that costs energy producers more money to produce oil but then sell this oil at the global market price, don't the costs only impact the energy producers?

eg. Let's say the price of oil is $120 dollars a barrel. The $15/dollar per tonne carbon tax introduced impacts the energy producers (primarily in the oil sands) so that their cost to pull out the oil is an extra $6 dollars a barrel. I believe to break even in the oilsands, oil has to be at least worth $50 dollars a barrel (that is a very conservative number, in reality it's less). The energy producer (we'll say Syncrude) still has to sell the oil at $120 dollars a barrel based on the current market price.

It seems to me that this increase in taxes has to be absorbed by the energy producer in their profits. Could somebody please provide a detailed explanation as to how an energy producer can somehow burden consumers with this cost?

[FFR]

Originally Posted by ikaris

About the thought of the green shift/carbon tax whatever you want to call it... To those who say that the energy producers will just shift the cost to the consumers, how is that even possible?

If you are competing in a global market where the price of oil is relative to fluctuations seen that are beyond our specific control, if we as a country implement a tax that costs energy producers more money to produce oil but then sell this oil at the global market price, don't the costs only impact the energy producers?

eg. Let's say the price of oil is $120 dollars a barrel. The $15/dollar per tonne carbon tax introduced impacts the energy producers (primarily in the oil sands) so that their cost to pull out the oil is an extra $6 dollars a barrel. I believe to break even in the oilsands, oil has to be at least worth $50 dollars a barrel (that is a very conservative number, in reality it's less). The energy producer (we'll say Syncrude) still has to sell the oil at $120 dollars a barrel based on the current market price.

It seems to me that this increase in taxes has to be absorbed by the energy producer in their profits. Could somebody please provide a detailed explanation as to how an energy producer can somehow burden consumers with this cost?

Becuase not only are oil sands productions going to be taxed by the Green Shift. Natural Gas, which is used to heat homes, business, etc will be taxed. Those increased costs will be passed to consumers because every competitor will be taxed, so every competitor will raise prices. Diesel, which is used by nearly every transport company, will be taxed. Those increases will be passed down the line, eventually, to consumers, again because everyone is taxed, so everyone will raise their prices to compensate.

There are two examples...would you like more? It's not necessarily all about the oil sands when it comes to consumer impact. It's my belief, that the impact the oil sands feels will simply kill the economy, because you're right, they can't simply up the price of oil to overcome the additional costs they are facing.

[ikaris]

Originally Posted by FFR

Becuase not only are oil sands productions going to be taxed by the Green Shift. Natural Gas, which is used to heat homes, business, etc will be taxed. Those increased costs will be passed to consumers because every competitor will be taxed, so every competitor will raise prices. Diesel, which is used by nearly every transport company, will be taxed. Those increases will be passed down the line, eventually, to consumers, again because everyone is taxed, so everyone will raise their prices to compensate.

There are two examples...would you like more? It's not necessarily all about the oil sands when it comes to consumer impact. It's my belief, that the impact the oil sands feels will simply kill the economy, because you're right, they can't simply up the price of oil to overcome the additional costs they are facing.

Ok, I got you but isn't that where the tax cuts come in? The potential increases that we may have to pay for the services impacted could be compensated by the reduced income tax we would have to pay. As well, would this not encourage polluting industries to facilitate greener mechanisms reducing pollution?

Currently, there is no incentive for any of the industries to move to a more efficient, green model of production. To me, this tax provides a stick, rather than a carrot of achieving this. The alternative is to provide tax breaks to companies that go green (which I believe the green shift does as well), but I think we've seen that this takes a lot longer to achieve the results that many think are necessary.

With regards to diesel, if the price goes up 7 cents in 4 years, is that a serious problem? And if gas goes up 2 cents a litre, again will that kill our economy?

[FFR]

Originally Posted by ikaris

Ok, I got you but isn't that where the tax cuts come in? The potential increases that we may have to pay for the services impacted could be compensated by the reduced income tax we would have to pay. As well, would this not encourage polluting industries to facilitate greener mechanisms reducing pollution?

Currently, there is no incentive for any of the industries to move to a more efficient, green model of production. To me, this tax provides a stick, rather than a carrot of achieving this. The alternative is to provide tax breaks to companies that go green (which I believe the green shift does as well), but I think we've seen that this takes a lot longer to achieve the results that many think are necessary.

With regards to diesel, if the price goes up 7 cents in 4 years, is that a serious problem? And if gas goes up 2 cents a litre, again will that kill our economy?

First off, a 1% tax cut will not offset the increases that I have to pay. The tax cut will definately cover my personal increases in costs for heating my house and such, but it's not going to cover an increase in EVERYTHING else (like food, clothing, furniture, etc.)

Second, having a tax would encourage polluters to decrease their emissions, if they were actually having to pay the tax. As you illuded to in your post, it sounds as if you realize that these taxes on the polluters will be passed onto consumers...so why would the company care? They aren't paying the tax, simply passing it on to someone else to pay it for them.

I completely agree that there needs to be incentives for companies to "go green." However, punishment does not work. Positive reinforcement does. It's simply psychology. If companies were to recieve more money for cutting emissions, they would all be more willing to work for it as it's bonus money with no strings attached.

Finally, no if the price of diesel only went up 7 cents per litre over four years that wouldn't be terrible at all. In fact, its most likely going to happen whether the Green Shift is implemented or not. But what you are forgetting is that the price of diesel is going to increase (due to iflation, increased oil or whatever) adn the 7 cent tax is ADDITIONAL to those increases. Business budget for increases in transportation costs, but they would have to budget for a 7cent increase, PLUS the regular fluctuatin of diesel, therefore, passing on that 7cents to consumers.

[ikaris]

Originally Posted by FFR

First off, a 1% tax cut will not offset the increases that I have to pay. The tax cut will definately cover my personal increases in costs for heating my house and such, but it's not going to cover an increase in EVERYTHING else (like food, clothing, furniture, etc.)

Is it really just a 1% tax cut? From my understanding this whole idea is "revenue neutral" which I take to mean whatever is generated will be provided back in tax cuts. More tax revenue = decreased income tax for consumers.

Originally Posted by FFR

Second, having a tax would encourage polluters to decrease their emissions, if they were actually having to pay the tax. As you illuded to in your post, it sounds as if you realize that these taxes on the polluters will be passed onto consumers...so why would the company care? They aren't paying the tax, simply passing it on to someone else to pay it for them.

This is the whole beauty of our capitalistic society. While many of the products and services may have inelastic demand currently, eventually they will become elastic. When they do, as prices go up, demand will decrease and the producers will have to adapt.

How? By reducing emissions to reduce their tax impact. The companies that don't do it will simply see their profits disappear as compared to the companies that do clean up their act.

This is obviously not going to be an immediate result, and it will take time to get there.

Originally Posted by FFR

I completely agree that there needs to be incentives for companies to "go green." However, punishment does not work. Positive reinforcement does. It's simply psychology. If companies were to recieve more money for cutting emissions, they would all be more willing to work for it as it's bonus money with no strings attached.

It's just that we've tried that, and we can see that it's not working.

Originally Posted by FFR

Finally, no if the price of diesel only went up 7 cents per litre over four years that wouldn't be terrible at all. In fact, its most likely going to happen whether the Green Shift is implemented or not. But what you are forgetting is that the price of diesel is going to increase (due to iflation, increased oil or whatever) adn the 7 cent tax is ADDITIONAL to those increases. Business budget for increases in transportation costs, but they would have to budget for a 7cent increase, PLUS the regular fluctuatin of diesel, therefore, passing on that 7cents to consumers.

This is where I would suggest that the more efficient companies using greener models will prevail and the prices that may have gone up, will eventually settle back down as the companies that refuse to change their ways go bankrupt.

This whole idea of the "green shift" is to help change the way we all consume. I don't think it's perfect, but it's certainly an idea by the Liberals and Greens that challenge the status quo.

I've now seen what the NDP wants to do (blech!). What about the Conservatives? They refuse to release their platform, which (as I mentioned before) scares the crap out of me. Is it because they don't have a plan?

[Bagor]

Originally Posted by FFR

Becuase not only are oil sands productions going to be taxed by the Green Shift. Natural Gas, which is used to heat homes, business, etc will be taxed. Those increased costs will be passed to consumers because every competitor will be taxed, so every competitor will raise prices.

Aren't there regulatory bodies that can prevent this? i.e. ensure that the tax isn't passed onto the consumer?

[CaptainCrunch]

Originally Posted by Bagor

Aren't there regulatory bodies that can prevent this? i.e. ensure that the tax isn't passed onto the consumer?

Sounds like Communism to me

[Bagor]

Originally Posted by ikaris

What about the Conservatives? They refuse to release their platform, which (as I mentioned before) scares the crap out of me. Is it because they don't have a plan?

The cynical realist in me says they haven't. Their record of cutting fundings for env programs designed to cut emissions suggests it's not a top priority.

That and their opposition to Kyoto under Rona Ambrose.

[FFR]

Originally Posted by ikaris

Is it really just a 1% tax cut? From my understanding this whole idea is "revenue neutral" which I take to mean whatever is generated will be provided back in tax cuts. More tax revenue = decreased income tax for consumers.

The only tax cuts that I have heard about are a 1% income tax cut. Revenue Neutral does not mean that additional funds raised by the government will be passed back to citizens in terms of tax cuts. The only thing that Revenue Neutral means is that whatever the government takes in, they will spend. Who said it has to be on more income tax cuts? Sure that may be the intent (but if it is, I've not heard that), but most likely, the raised funds will go to more social programs which don't affect the majority of society.

Originally Posted by ikaris

This is the whole beauty of our capitalistic society. While many of the products and services may have inelastic demand currently, eventually they will become elastic. When they do, as prices go up, demand will decrease and the producers will have to adapt.

How? By reducing emissions to reduce their tax impact. The companies that don't do it will simply see their profits disappear as compared to the companies that do clean up their act.

This is obviously not going to be an immediate result, and it will take time to get there.

See, this is one point that we strongly disagree. Please explain to me how I will be able to reduce my use of natural gas to heat my home. I already turn my furnace off completely for 5-6 months of the year and have a programmable thermostat to turn down the temperature when no one is home. Unforunately, Canada is a cold place some times, and no matter what costs the natural gas companies pass to me, I have to suck it up and pay it because I need to live.

I also need to eat food. Again, no matter how much costs are raised by producers and retailers, I have to buy food. I live in a condo building. I don't have a yard where I can plant my own food to try and spend less.

Please explain to me how exactly, natural gas and food will become elastic, because frankly, I'm not seeing it.

Originally Posted by ikaris

It's just that we've tried that, and we can see that it's not working.



This is where I would suggest that the more efficient companies using greener models will prevail and the prices that may have gone up, will eventually settle back down as the companies that refuse to change their ways go bankrupt.

Except, again, there is a problem with this statement. Companies that transport any goods, need to use diesel to transport. It's more environmentally friendly than gasoline, so what do you suggest they do to begin using a "greener" model? They can't do anything, so they will pass on costs to consumers.

And how exactly, are companies going bankrupt going to help our already struggling economy?? Companies that go bankrupt affect alot more than just the CEOs and managers. What about all the employees that are working for those companies? Where do you suggest they go? To the other companies that are cutting as many costs as they can to try to keep consumer prices down?

Originally Posted by ikaris

This whole idea of the "green shift" is to help change the way we all consume. I don't think it's perfect, but it's certainly an idea by the Liberals and Greens that challenge the status quo.

I've now seen what the NDP wants to do (blech!). What about the Conservatives? They refuse to release their platform, which (as I mentioned before) scares the crap out of me. Is it because they don't have a plan?

The Conservatives plan is here: http://www.ec.gc.ca/cleanair-airpur/...84CB7-1_En.htm

I will be completely honest and say that I havne't read through the entire thing yet, but you can't say they dont have a plan. At least their plan has targets, which is more than the Green Shift has.