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Michael Ignatieff Wants Canadians to Pay More for Gas

Author: John Williamson 2006/08/21
by Saskatchewan Director David MacLean and Federal Director John Williamson

Michael Ignatieff, the front-runner in the Liberal leadership race, released his Kyoto action plan Monday. His proposals are dressed up as being "market-oriented," but what's on offer is more of the same - higher taxes, more regulations, and bigger government.

The Ignatieff plan proposes twelve policies aimed at reducing greenhouse gas emissions. They all involve spending more tax dollars, collecting more tax dollars, or creating more regulations to ensure just the right amount of government coercion.

The only good news is that Mr. Ignatieff is scrapping the Liberal Party's policy to reduce Canada's carbon emissions to 6% below 1990 levels by 2012. This is the latest reminder of how the Kyoto Protocol is a public relations exercise with targets that cannot be met without drastic cuts to energy consumption. Following 12 long years of Liberal rule, Canada emissions were approximately 30% above 1990 levels.

Instead, Mr. Ignatieff wants to reduce CO2 emissions by 50% by 2050. He intends to meet this goal by allowing private companies to pay other companies for the right to emit more CO2, say when a business expands, under the often-criticized emissions trading plan. He proposes imposing a cap on emissions with Ottawa selling additional permits and the revenues flowing to provincial coffers. And if that's not enough taxpayers will pay millions of dollars for imaginary "credits" from Moscow to heat our homes in the winter while Russia's emissions keep rising. A policy described as buying "hot air."

The plan calls for forcing car manufacturers to build a certain number of low-emissions vehicles, more subsidies for the bio-fuels industry and a "public engagement strategy." Get ready for a return of those Rick Mercer commercials and Soviet-style central economic planning. What happens if consumers do not want or cannot afford a hybrid vehicle What are car companies supposed to do with surplus vehicles the government forced them to build, dump them in Lake Ontario

Another red flag is that Mr. Ignatieff wants to heavily tax regular gas while cutting taxes on ethanol or biofuel blended fuels, which he calls revenue-neutral "tax shifting." He says if there is any surplus from higher gas taxes it will be recycled back to the provinces. A truly revenue neutral move means cutting other taxes, like income taxes or the GST. It is not transferring surplus dollars to another government. What Mr. Ignatieff is proposing is a tax increase.

Even if motorists do fill up using Iggy-approved fuel, they will be paying more at the pumps. Producing ethanol is not cheap. One problem with biofuels is they do more to inflate the price of wheat, canola or corn than they do to reduce emissions. Biofuels may make sense from a geo-political perspective by reducing reliance on Arab oil, but any benefits from ethanol and biodiesel to reduce greenhouse gases might be negligible. Some scientists claim it takes more energy to make ethanol and biodiesel than it does to make gasoline from crude oil. (For more, please see this story from National Public Radio:

Mr. Ignatieff's subsidy game is corporate welfare by another name. Mr. Ignatieff promises to "protect" Canada's biofuels industry from subsidized U.S. competition. That "protection" can come in two ways: biofuel producers will be forever propped up by direct government subsidies or Canadians will be forced to "buy Canadian." Either way, consumers pay more.

Mr. Ignatieff claims he has consulted extensively with the "experts and other stakeholders to pull together some of the best thinking on climate change policy in Canada." Who fits under the category of "other " It is obviously not taxpayers or anyone who drives a vehicle.

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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