New Brunswick Should Reject a Carbon Tax
This article first appeared in the Telegraph Journal on Sept 22, 2016
New Brunswickers pay $650 million or $1,100 per tax filer more each and every year in income, sales and gasoline taxes than they did just five years ago.
This is a staggering amount of extra revenue given that all of it comes directly off the paychecks or out of the pockets of working taxpayers.
After raising just about every tax and fee possible, the debt-ridden government in Fredericton is now looking at other ways to get more money from taxpayers. The government dispatched a legislative committee to go out and consult on a new carbon tax for New Brunswick.
The theory of a carbon tax goes something like this: if we tax something that is bad (ie. carbon) and then reduce other taxes on things such as income, it will produce good outcomes for the province.
But the problem with a carbon tax is taxpayers just end up paying more, the government gets fatter and it does nothing to benefit the environment.
Take the example of the British Columbia carbon tax.
When it was first introduced, the carbon tax was touted as being “revenue neutral.” Politicians used this line to help sell the carbon tax by telling voters it would cost them no more under this new taxation system.
As it turns out politicians in BC were correct, the tax is revenue neutral – for the government – but it is still costing the average worker more. A “revenue neutral” carbon tax is a myth, and politicians should be honest with taxpayers that this is yet another tax grab.
The BC government rakes in about $1.2 billion each year in carbon taxes. However, it only returned a little less than 50 per cent of that in the form of personal tax reductions in 2014-15.
Those personal tax relief measures don’t even apply to all taxpayers. For example, the “rural and homeowner benefit” is only for those who live in a particular part of the province. The BC senior’s renovation tax credit is only available to those over 65 who have enough disposable income to be able to afford to renovate their homes.
The rest of the offsets have no impact on most taxpayers or have nothing to do with helping the environment.
For example, the blockbuster film “the Smurfs,” grossed $563 million worldwide, and collected a $3 million subsidy from BC taxpayers. That money came from the carbon tax as a carbon tax “offset.”
Fluctuations in gas prices allow us to see how people would behave when prices are lower and when they are higher. In New Brunswick between 2006 and 2010, the average maximum price of fuel was $1.0417 per litre. Between 2011 and 2015 the maximum price for fuel in New Brunswick increased to $1.2480 per litre. That’s an increase of about 20 per cent.
Did this increase in the price of fuel reduce the overall consumption of gross sales of gasoline? The answer is no. In fact, the amount of gasoline consumed by New Brunswickers increased even though it was more expensive.
The problem is New Brunswickers don’t have viable alternative to limit their environmental impact. Public transit is a challenge in New Brunswick simply because it lacks the population density of major centres like Toronto, Montreal, Calgary and Vancouver.
But even if we could significantly change our lifestyles, we’re much too small of a province to make a real impact. Canada as a whole produces only 1.6 per cent of world greenhouse gas emissions. New Brunswick produces 2 per cent of Canada’s emissions. Or in other words, New Brunswick produces 0.03 per cent of world greenhouse gas emissions.
Forget about hitting your targets. If New Brunswick eliminated every single bit of its greenhouse gas emissions, it wouldn’t make even a tiny dent in world emissions or on the world’s climate.
So given that we know that taxpayers are tapped out, and that anything the government does will have next to no impact on our climate, why would the government risk damaging the province’s economy and putting more pressure on hard working taxpayers?
Working together for a cleaner environment is an important goal. But we as taxpayers should demand honesty from our politicians, and that means they tell the truth about carbon taxes -- they do little to nothing to benefit our environment, they cripple our economy and they will only give politicians more money to dole out to special interest groups.
Kevin Lacey is Atlantic Director with the Canadian Taxpayers Federation