Wednesday, July 02, 2008

MP Goodale Makes Some Solid Points On Green Shift & Saskatchewan

Another week, and another well thought out Goodale Weekly Newsletter/email. Ralph explains the Green Shift Plan and it's implications for Saskatchewan. He makes some great points... Have a read:

WEEKLY COMMENTARY

By Ralph Goodale, M.P.

DOES THE “GREEN SHIFT” WORK FOR SASKATCHEWAN?

The short answer is yes!

Some say a cross-country “carbon tax” may affect Saskatchewan more than other provinces, because of the high level of greenhouse gas emissions in our resource-based economy.

But it’s crucial to examine who would actually have to remit payment to Revenue Canada.

This would not be a retail tax, like the GST. It would apply “upstream” at the wholesale level. Consequently, the obligation to remit the tax would be carried by the corporate head offices of companies in the fossil fuels sector, and a big majority of them are not in Saskatchewan.

So, while this province is where many emissions arise, the responsibility to pay any tax on those emissions is largely located elsewhere – in Ontario, Alberta or even the United States.

But what about consumers? If upstream energy sources become more expensive because of a carbon tax, won’t that get passed down the line for consumers to pay?

The energy prices consumers pay will be determined, as always, by what’s going on in world markets. But some of any carbon tax will get embedded in the final consumer price.

This is equally true under Stephen Harper’s greenhouse gas regulatory scheme. It comes with a cost too.

But a key difference with Stephane Dion’s proposal is that every penny from a levy on carbon will be returned to consumers through income tax cuts.

For example, after being phased-in over four years, the impact of the Dion plan on the average Saskatchewan household is expected to be less than $400 per year. The corresponding income tax cut for that same family with, say, two kids and earnings of $60,000, would be about $1,350 per year.

By contrast, under Mr. Harper’s regulatory plan, there are no tax cuts or offsets. None whatsoever.

1 comment:

Mark Francis said...

I keep telling people attacking the Green Shift on a regional basis that Harper's plan will also transfer wealth from high emission regions to low emission regions, but I think those people are more interested in spreading lies for political purposes then in being accurate.