Canadian Federal Politics Thread v5

[Samonadreau]

Originally Posted by opendoor

Why would it compound? Imagine a product passes through 3 businesses and the carbon tax led to a 0.1% increase in input costs for each:

No carbon tax:

Business 1 produces good and sells it for $1,000
Business 2 buys good for $1,000 and distributes it for $500
Business 3 buys good for $1,500 and sells it retail for $2,000

With carbon tax:

Business 1 produces good and sells it for $1,001
Business 2 buys good for $1,001 and packages/transports it for $500.50
Business 3 buys good for $1,501.50 and sells it at retail for $2,002

So even with each business adding 0.1% to their final price, the end result is still a 0.1% price increase.

If the compounding you were talking about happened in reality, then small changes in commodity prices would blow up into large inflationary and deflationary price swings in the final price of a product.

As GGG pointed out, the effect would lessen over time because the relative increases get smaller. 40% -> 50% is a 25% increase whereas $155 -> $170 is only a 9.7% increase.

Because company B and C are marking up this increase in inflation. If your operation costs increase by .1%, you don't just increase your services or sales price by .1%, you increase them by say 10%(.01) more then .1% to ensure you are maintaining a margin of profit on this increase in operating costs. All increases in operating costs should be marked up. This markup can get handed over and then marked up again. This is just one example, there will be more ways indirect costs get added.

There is more then Company B and C involved typically, and it's likely higher then the base of .1%

[GGG]

Originally Posted by Samonadreau

Because company B and C are marking up this increase in inflation. If your operation costs increase by .1%, you don't just increase your services or sales price by .1%, you increase them by say 10%(.01) more then .1% to ensure you are maintaining a margin of profit on this increase in operating costs. All increases in operating costs should be marked up. This markup can get handed over and then marked up again. This is just one example, there will be more ways indirect costs get added.

There is more then Company B and C involved typically, and it's likely higher then the base of .1%

The markup is constant % wise.

Price A $10 cost of good $5. The cost of goods increase by 20% to $6. Mark up 100% to $12. Cost of good increased by 20%. As long as the markup is a fixed % then there is no additive affect. Inflation in this scenario was 20% so the good in real dollars and the profit in real dollars remains the same.

It’s why we should still tip 10-15% and not 20-25% even though things are more expensive now.

[Samonadreau]

^So in this scenario though, you need to look at $ value, not percent.

Let's say that now because there was a tax added to the original cost, it went up by $0.25 to $6.25.

Now you're being told that only $0.25 is additional cost is from the tax. Now that $6.25 gets marked up to $12.50. Nothing in the markup was included in what was reported as being the total cost to the consumer from the tax and you are being told only $0.25 cost was added because of the tax, but in reality, $0.50 was total final cost added from the tax.

In this case you are being told only an extra $0.25 came out of your pocket from the tax but actually $0.50 did.

So the effect on inflation is twice as much as what was first added as tax.

Government got $0.25 in special tax. Customer pays $0.50 extra.

Just because percentages stay the same doest mean that additional costs from markups or other indirect costs to the customer have been factored in for how much of the final cost was from that initial tax.

[Fuzz]

It feels like you are troubled by inflation, but you are trying to put the blame on the carbon tax. Recent high inflation is a global issue, not restricted to countries with carbon taxes. So I think your target is misplaced.

[Azure]

Originally Posted by Samonadreau

I think Canadians are just frustrated over Inflation and Wage increases not matching the increased costs of living. The carbon tax is a tipping point so to speak just for frustration of the average Canadian.

I know my wages have increased about 8% in the last 5 years. Or an average of about1.6%. Would like to see the average inflation over that time. And I'm better off then a lot of others I know.

Also, applying a carbon tax while not providing financial incentives for people to not have to pay carbon tax, i.e. payment for full heat pump cost & installation is another big issue.

Where is the money going? Is it going back to small businesses? It may be now to some degree, but it sure wasn't for a few years. That means that small businesses were paying a cost increase, seeing no rebate, resulting in costs being passed on to their customers.

The whole point of taxing carbon should be followed up with strong financial incentives for non-carbon replacements. As a small business owner heavily investing in water to air geothermal, we haven't found that to be necessarily true. The insane part is that it would be so easy to do. Also, we have the option to install water to air geothermal, but many people don't have the funds, resources or expertise in their area to do something like that. So if you're stuck with a natural gas or propane heating installation, there is nothing you can really do about it other than pay the carbon tax.

That is why the entire program has been bungled, and why politicians are seeing blood in the water with getting rid of it or phasing it back.

The other problem is that most people look at it from the perspective an individual that gets a rebate. Small and large business don't live in that reality, and its not as simple as just 'oh well throw out that natural gas boiler' and install a heating source that is non-carbon based. Here in Manitoba where winters are -30 C, it isn't that simple. Yes, on the consumer side you can install an electric boiler, and many do that with low power costs, but you can't heat a 100,000 square foot building with electric boilers.

So in theory I agree with the concept of the carbon tax, but man it sure isn't being managed properly to make sure that the inflationary issues that come up can be dealt with.

[GGG]

Originally Posted by Samonadreau

^So in this scenario though, you need to look at $ value, not percent.

Let's say that now because there was a tax added to the original cost, it went up by $0.25 to $6.25.

Now you're being told that only $0.25 is additional cost is from the tax. Now that $6.25 gets marked up to $12.50. Nothing in the markup was included in what was reported as being the total cost to the consumer from the tax and you are being told only $0.25 cost was added because of the tax, but in reality, $0.50 was total final cost added from the tax.

In this case you are being told only an extra $0.25 came out of your pocket from the tax but actually $0.50 did.

So the effect on inflation is twice as much as what was first added as tax.

Government got $0.25 in special tax. Customer pays $0.50 extra.

Just because percentages stay the same doest mean that additional costs from markups or other indirect costs to the customer have been factored in for how much of the final cost was from that initial tax.

Inflation is measured as a %. If the Carbon Tax is attributed to .1% inflation it affects the finished good and the retail price equally. You already accounted for the affect you describe in the primary vs secondary consideration. You don’t get to double again for no reasons.

[GGG]

Originally Posted by Samonadreau

Because you can only take so much out of people's pockets and there gets to be a points where burden kicks in and they don't stop buying as much of it, or cheaper options.

If groceries go up 15%, you can try to cut 10% of your costs in purchases. Now if they up another 15% you maybe can't cut another 10% of your costs in purchases.

How much of it I have no idea, but somehow that would factor in.

What you describe above would be deflationary. There is less real dollars chasing goods. This creates negative price pressure.

[Azure]

Originally Posted by GGG

Inflation is measured as a %. If the Carbon Tax is attributed to .1% inflation it affects the finished good and the retail price equally. You already accounted for the affect you describe in the primary vs secondary consideration. You don’t get to double again for no reasons.

It is very hard to properly assess what the actual inflationary affect has been from the carbon tax.

Even with fuel costs for small & large businesses. Why was there gas tax holidays in many provinces? In fact the NDP government in Manitoba even extended it. Because the high cost of fuel was adding costs to businesses who were then passing on the cost to their customers. The carbon tax does the same thing. The rebates that individuals were getting were not being passed back to small businesses, therefore costs had to be increased in order to maintain a viable financial situation.

This was going on for 5 years. In fact even today, what percentage of the $2.5 billion have actually been sent back?

So to think that the business world was not just passing these costs on year after year is pretty ridiculous.

Again, the program was bungled, poorly administrated, poorly explained and poorly executed.

[OldDutch]

Economic arguments aside I think its downright hilarious the presidental debate had both Republicans and Democrats fighting over who was better for oil production.

A country with 100x the pollution and here we are. Reminds me of Daniel Plainview and the milkshake.

[opendoor]

Originally Posted by Samonadreau

Because company B and C are marking up this increase in inflation. If your operation costs increase by .1%, you don't just increase your services or sales price by .1%, you increase them by say 10%(.01) more then .1% to ensure you are maintaining a margin of profit on this increase in operating costs. All increases in operating costs should be marked up. This markup can get handed over and then marked up again. This is just one example, there will be more ways indirect costs get added.

There is more then Company B and C involved typically, and it's likely higher then the base of .1%

Profit margin markups don't change anything:

Input cost = $1,000 + 50% markup = $1,500 selling price

Input cost + carbon tax increase = $1,001 + 50% markup = $1,501.50

The profit margin was maintained at the same % and the final price increase is still only 0.1%.


Unless you're saying that companies take the increase in input costs and then decide to arbitrarily inflate their profit margin percentage on top of that (or apply the increase to other unaffected input costs too). But if they could do that without being undercut by competitors, why wouldn't they do that for everything? Why is a carbon tax increase adding $0.02/L to gasoline any different than the price of gas going up by $0.02 as it does all the time?

[opendoor]

Originally Posted by Azure

It is very hard to properly assess what the actual inflationary affect has been from the carbon tax.

It really isn't. Decades of data clearly illustrates how energy price changes impact the cost of final goods. Why would the carbon tax changing the price of a commodity have any different effect than the changes in market price would?

[GGG]

Originally Posted by Azure

It is very hard to properly assess what the actual inflationary affect has been from the carbon tax.

Even with fuel costs for small & large businesses. Why was there gas tax holidays in many provinces? In fact the NDP government in Manitoba even extended it. Because the high cost of fuel was adding costs to businesses who were then passing on the cost to their customers. The carbon tax does the same thing. The rebates that individuals were getting were not being passed back to small businesses, therefore costs had to be increased in order to maintain a viable financial situation.

This was going on for 5 years. In fact even today, what percentage of the $2.5 billion have actually been sent back?

So to think that the business world was not just passing these costs on year after year is pretty ridiculous.

Again, the program was bungled, poorly administrated, poorly explained and poorly executed.

The rebates being passed to individuals are be given back to businesses. Buisinesses charger higher prices contributing a small measurable amount to inflation but doesn’t affect purchasing power of the consumer.

The gas tax holidays were purely political in nature. For whatever reason the pump price that states you in the face everyday makes people really sensitive to it for what amounts to the smallest tax someone pays. At 50L a week a 15 cent gas tax cut is $390 per year.

I’d argue the carbon tax is working exactly as intended and if it would have worked really well if it had been in place globally 1992 when Koyoto started. It’s designed around incremental change.

[Firebot]

https://globalnews.ca/news/10757723/...-mortgage-cap/

First-time homebuyers, as well as those purchasing new builds, will soon be able to take out insured mortgages with a 30-year amortization, up from the typical 25-year payback period.

Additionally, the Liberals are raising the price cap for taking out insured mortgages to $1.5 million compared with the previous bar of $1 million.

Perfect timing as the Toronto real estate market is heating up again as recent rate cuts make their mark. The 1.5 million cap change will be a bigger factor to ensure pricing will remain high, ensuring long term sustainability in housing.

https://www.thestar.com/real-estate/...5f000de10.html

[Fuzz]

I used to think the Bloc had zero redeeming factors, but Blanchet has Bill C-367 and I gotta say, there is zero way any logical thinking human can be against this.

SUMMARY
This enactment amends the Criminal Code to eliminate as a defence against wilful promotion of hatred or antisemitism the fact that a person, in good faith, expressed or attempted to establish by an argument an opinion on a religious subject or an opinion based on a belief in a religious text.

https://www.parl.ca/DocumentViewer/e.../first-reading

Secondly, a person may also be protected if they express or attempt to establish an opinion on a religious subject or belief based on a religious text, as long as this is done in good faith.

https://www.criminal-code.ca/crimina...ces/index.html

Now, I'm not a fancy law takin' guy, but as I understand it right now you can get away with hatred of a group if you can find a line in an old book that defends you, and you really really sell that you believe it. This means that there is no supremacy of Law, because it defers to fiction.

Will be interesting to see the objections to this.

[Azure]

Originally Posted by GGG

The rebates being passed to individuals are be given back to businesses. Buisinesses charger higher prices contributing a small measurable amount to inflation but doesn’t affect purchasing power of the consumer.

The gas tax holidays were purely political in nature. For whatever reason the pump price that states you in the face everyday makes people really sensitive to it for what amounts to the smallest tax someone pays. At 50L a week a 15 cent gas tax cut is $390 per year.

I’d argue the carbon tax is working exactly as intended and if it would have worked really well if it had been in place globally 1992 when Koyoto started. It’s designed around incremental change.

Not for 5 years they weren't. So you think now that they're final rolling back to small businesses that desperately needed them they'll magic lower their prices?

The discussion here is if the carbon tax resulted in prices being increased, and your position on the argument is 'well why would it, there are rebates' when that wasn't true for a very long period of time, including during the pandemic, and even despite that FACT you still can't admit that it drove up inflation more than anticipated?

Either way, looks very much like we'll have a Conservative government federally, and I for one cannot wait until this completely trash piece of legislation is kicked to the curb. Also nice to see more provinces wake up and realize what pile of garbage the entire thing is.

Trying to change behavioural spending without creating long-term incentives to push the spending in a certain direction = failure. We're over 10 years into this stupidity and there still aren't proper incentives in place to allow people & businesses to permanently move away from carbon based anything.

[Fuzz]

I would agree with Azure that the lack of a continuous well thought out incentive plan that Canadians can rely on, and not have rug pulled or reconfigured every couple years is probably not helpful. If the goal is to reduce emissions, and reduce costs for Canadians by having them spend a little more upfront, you kinda need that to be a big part of the system.

[Fuzz]

Trudeau could have set a nice trap up years ago by having some of your rebates go into savings plans you could withdraw from for home improvements or purchasing more efficient vehicles. Then Pierre would be seen as stealing those savings from Canadians, so it would be tough to unwind.

[Azure]

Originally Posted by Fuzz

Trudeau could have set a nice trap up years ago by having some of your rebates go into savings plans you could withdraw from for home improvements or purchasing more efficient vehicles. Then Pierre would be seen as stealing those savings from Canadians, so it would be tough to unwind.

Or just setup a fund that would be used to fund transitions away from high carbon stuff to low carbon stuff.

It really isn't that hard to do.

Could still be done, actually.

[Azure]

The other crazy part here is that there are multiple provinces in Canada that have some of the cheapest electricity rates in the world.

It should have been SO easy to get people in those provinces to move towards low carbon everything because there was an added bonus of cheap electricity rates. Nothing beats a heating system with a heat pump & electric backup as an example if you live in a low cost electricity jurisdiction. The heat pump won't always work beyond -20C, but not the worst thing in the world to run the electric furnace during the colder periods.

[Azure]

The Canadian government on Friday announced a loan of $2.14 billion to satellite operator Telesat to help the company build its broadband satellite constellation, in what Prime Minister Justin Trudeau described as Canada’s largest ever space program.

Quebec’s government, meanwhile, announced a loan of $400 million to the company, which has contracted aerospace technology firm MDA to build its satellites in Ste-Anne-de-Bellevue, Que.

https://globalnews.ca/news/10754874/...ebec-billions/

lol. What a waste of money. Shall we wait 2 or 3 years before we ask if anything was actually accomplished? You know, like those billions we've given other telecom companies that has resulted in nothing.