“Revenue neutrality – a new tax is considered revenue neutral only if all revenues collected by that tax are returned through offsetting tax cuts. This means that there is no overall increase in government revenues.” – The Fraser Institute
Premier Notley in increasing the Alberta carbon tax from $15 to $30 has declared that “all of the money will be re-invested in Alberta.” What makes the fact that the tax money will be re-invested in Alberta a revenue neutral tax? Any new tax is a new tax regardless of whether, as in the case of British Columbia, other taxes are reduced. The fact is that even if other taxes are lowered, there must be a cut in other government programs to make up for the shortfall when other taxes are reduced. In other words, it is just a play on words.
That aside, let’s examine the increased revenue from the so-called ‘revenue neutral’ carbon tax. Personally, I have no problem with an increase in gasoline prices. We have long talked about toll roads and an increase in gasoline prices is probably the fairest way to pay for our highways, whether they are urban, rural or interurban highways. Everyone will pay based on the number of kilometres they drive – that’s perfectly fair! A tax on gasoline may also have the effect of reducing the amount of fuel consumed hence a reduction in greenhouse gas emissions. I am somewhat dubious as to the overall effect on reduced use of motor vehicles but in any event it is a means for the consumer to contribute their share of GHGs based on their own discretionary travel.
If the new revenue is put toward innovative research into means to reduce our carbon footprint that is also a realistic approach to reducing society’s influence on the atmospheric effect. Similarly, if the revenue is used to reduce the amount of pollution from coal fired electrical generation that is also a good thing even if that form of pollution is more particulate-based than carbon-based.
Sure a carbon tax is going to hit every consumer and taxpayer but so be it! A tax on corporations is just a tax on consumers in the end anyway, so why not tax the ultimate polluter – you and I. If we are going to tackle climate change, it is you and I – the consumer, that ultimately must bear the responsibility. Corporations are just there to produce the goods you and I consume.
It would be nice if the government was to lay out a specific plan as to how this revenue windfall is to be allotted to the climate change plan. It will be a break in confidence if the monies are used for more social programs or even to improve our broken health care system. They must be allotted to programs that truly have some relationship to combating climate change.
Whether we believe in the concept of anthropogenic global warming or not, the commitment has been made to introduce a climate change program in Alberta supported by a carbon tax.
And also whether we like it or not – let’s face it – a tax is a tax is a tax!
Ken Allred is a former St. Albert alderman and MLA.
