Presented at the:
South Island Conservative Breakfast, June 20, 2008

Introduction

Thank you very much for inviting me to speak to you here today.

The Canadian Taxpayers Federation is a non-profit, non partisan citizen's advocacy group. The CTF was founded in 1990 and we have 60,000 voluntary supporters across the country.

Our mission is three-fold: lower taxes, less waste and more accountable government.

The B.C. government has done a good job lowering taxes across the board. This type of across the board tax cutting is what the Federal government could do - instead of targeted tax cuts designed to benefit groups more likely to vote for them.

Fortunately, the federal government is not following the carbon tax example. The carbon tax here in B.C. is a shift away from the policies that helped bring us back from have not status.

Premier Gordon Campbell's carbon tax will start on July 1, less than two weeks from today.

The carbon tax will drain family income directly with higher gasoline and home heating costs, and indirectly as municipalities and businesses pass on their energy cost increases.

Equally devastating is the economic hit to some of the province's biggest industries when the carbon tax leaves them less competitive in the world marketplace.

The government's own estimates show the carbon tax will do little to help it reach its greenhouse gas reduction goal. We could completely devastate the economy and it would have no effect on carbon dioxide in the global atmosphere.

The Environment

You're probably thinking - she doesn't care about the environment.

But we all care about the environment - we all value a clean environment.

And we particularly value clean air.

You wouldn't know it from all the hype, but the air quality in the Vancouver region has improved tremendously. For example, the level of sulfur dioxide, one of the nastiest air pollutants, has fallen by about half over the past 30 years, even with a growing population.
In 2004, CO2 levels in the Capital Regional District were 13% lower than in 1995, (primarily due to lower landfill gas emissions with the installation of a methane gas recovery system at the Hartland Landfill).
Do we hear about these things? NO
Particulate matter levels, one of the pollutants that can seriously affect human health, have been relatively constant in recent years, with no apparent trend. But concentrations are lower than in the 1980's.

So air quality in the Lower Mainland is better than it was 30 years ago.

Even so, in Canada, a study that came out a few months ago showed that about 6,000 people die from air pollution-related causes each year.
Do you know how many of those 6,000 Canadians will be saved after we spend billions of dollars to reduce man-made carbon dioxide?

Not one - Why?

Because carbon dioxide isn't a toxic pollutant.

Let me repeat that - carbon dioxide is not a toxic pollutant.

Reducing carbon dioxide levels will do little if anything to improve air quality.

When we talk about reducing carbon dioxide, or CO2, we are not talking about making the air cleaner or reducing deaths from polluted air. We are talking about trying to influence global temperature.

Governments have already spent billions of dollars on CO2 reduction strategies, and CO2 levels continue to rise.

What is going on?

There are probably lots of reasons why governments have latched on to the global warming hysteria. For sure, they can make grand pronouncements about saving the environment.

But right now, this hysteria has created a handy excuse to increase the size of government and raise taxes. And B.C.'s carbon tax is one of them.

Carbon Taxes

What is a carbon tax?

Carbon taxes tax fossil fuels such as gasoline for the CO2 they release into the atmosphere.

The B.C. carbon tax starts at $10 per tonne on July 1 and goes up by $5 each year to $30 per tonne in 2012. At the gas pump, the tax starts at 2.4 cents and rises to 7.2 cents per litre by 2012.

The goal is to reduce greenhouse gas emissions by 33% from 2007 levels by 2020.

In theory, the carbon tax will manipulate people into assuming the politically correct low carbon lifestyle, but the premier's own behind-the-throne carbon tax guru suggests people's behaviour won't change until the carbon reaches $180 per tonne. That translates to a 43.2 cents per litre tax increase at the pumps.

That would bring the price of gasoline closer to $2.00 per litre, rather than bumping it up over the $1.50 per litre mark we seem to be heading for now.

Revenue Neutral

B.C.'s carbon tax is supposed to be revenue neutral. The new carbon tax has been matched by individual and business income tax reductions.

The last time Canadians were told a tax would be "revenue neutral" was when the GST was introduced. Instead of being neutral, the federal government has collected, and continues to collect, billions of additional tax dollars. The same will likely be true of B.C.'s carbon tax.

Gullible citizens are supposed to believe that the carbon tax increase will be matched by income tax cuts and somehow stop global warming.

The experience in the UK suggests tax cuts are soon forgotten.

The UK's climate change levy - as its carbon tax is called - was supposed to be revenue neutral. The climate change levy is a tax applied to energy use by industry, business, and the public sector. When it was introduced in 2001, the government cut the employer's rate of the National Insurance contribution by 0.3 percent. (National Insurance is a social security benefit scheme paid into by both employers and employees.) But it didn't last. By 2003 the employer's contribution was increased by 1%. So much for compensating tax cuts.

Not only that, between 2000-2005, carbon dioxide emissions went up by about 4% in the UK. So much for a drop in CO2 emissions. (Manufacturing employment dropped about 20% in that period.)

Cuts to CO2 and EU experience

We could learn more lessons from Europe. Governments there have imposed a garden variety of GHG reduction measures since the early 1990's. Nevertheless, CO2 went up in Europe by 5% between 1991 and 2005. What did go down in that same period, though, were manufacturing jobs. Norway, Sweden and Germany, for example, saw manufacturing jobs fall by 5.6%, 18.5% and 30% respectively. Did emissions fall then as well? CO2 emissions increased a whopping 62% in Norway and 11.3% in Sweden, but fell by 8.6% in Germany. It appears the drop in manufacturing jobs must be massive to get much of a fall in CO2 emissions.

Think about this. Gordon Campbell's goal is to reduce the province's greenhouse gas emissions by 40-million tonnes by 2020. Most of British Columbia's greenhouse gas emissions come from transportation. So if the goal is really to reduce ghgs, putting a tax on fossil fuels like gasoline and diesel makes sense.

Yet, the current carbon tax policy in B.C. is expected to reduce GHG's by only 3-million tonnes – or 7% of the total -- by 2020. Where's the other 93% coming from?

If the price of reducing 3-million tonnes is $1.8-billion, what's it going to cost families to reduce by 37-million tonnes more?

So you might think our premier had some help, maybe some scientific input, into the development of ghg reduction goal - after all, the cost to families will be huge.

But he didn't.

In November 2007, in a conversation televised on Vaughn Palmer's Voice of BC program,

Vaugh asked the premier how reaching the ghg reduction goal would be doable. He said: "I can't find any studies that were done before the Throne Speech that indicated any research was done on this at all."

Premier Campbell said, "I don't want to pretend this was some - that I asked a scientific panel about how to get there. I didn't." Premier Campbell went on to say, "We felt that 10 percent below 1990 was a reasonable and achievable target for us to reach. That was 33 percent below 2007, and that makes sense to me."

So now "feelings" determine important policies in British Columbia, not science or evidence. In fact, if the premier wants to see where all this is leading, maybe he should read some of the books his climate change guru Mark Jaccard has written. Mr. Jaccard doesn't like clean and low cost energy or the people who would use them. Jaccard writes, "clean and low cost energy would free people to live and travel where they want, and consume as much as they want, which could intensify the pressure on valued ecosystems and the depletion of other non-renewable resources." This is an attack on our way of life.

Business Cost Increases Will Hit Taxpayers as Well

So individuals and families will pay more to heat their homes and fill their cars with gas. Those are the direct costs.

But there are indirect costs as well. The carbon tax will reach much farther into the pockets of British Columbians than is seems at first.

Municipalities and businesses also pay the carbon tax. So while income tax cuts will supposedly offset the direct costs of the carbon tax, at least for those able to assume the correct low-carbon lifestyle, there are no tax cuts for the indirect costs - higher property taxes and high prices for goods and services.

Municipal governments will have to pay the carbon tax on their heating bills and gasoline for fleet vehicles. That increase will be passed along in the form of higher property taxes. In Williams Lake, for example, the mayor's office calculates the property tax increase for citizens will be an extra one per cent. Mayors in northern towns have banded together to fight the carbon tax, but have been told straight out by the province's finance minister they'll get no relief from the carbon tax. So the carbon tax will increase the cost of local government, which will, of course, be paid for by local taxpayers in the form of higher property taxes.

Business will pay the lion's share of the carbon tax. Of the $1.85 billion the government expects to collect from the carbon tax over the next three years, about 70% of that will come from business, but business will only get 30% of the tax cuts. Individuals, on the other hand, will pay 30% of the cost and receive 70% of the tax cuts.

But before you start jumping for joy, don't think for a minute this means a break for individuals. Businesses that sell domestically will pass that tax increase back to consumers.

Remember, just about everything we consume is transported to us from somewhere. So the price of food, clothing, and all other basic necessities will also rise. Higher gasoline taxes equal higher transportation costs, which will be passed on to consumers for everything from food to clothing. People pay taxes, not businesses. We will be paying for the carbon tax in more ways than one.

So, things are looking pretty bleak. But you know what? - it gets worse.

The carbon tax will cause real problems for exporters. Most big industrial employers in British Columbia export their products and compete against companies that do not face carbon taxes.

The forestry industry is already in big trouble, and the carbon tax could be the last nail in its coffin.

The mining industry, one of the highest paying industries in the province, is an obvious place for displaced forestry workers to look for new employment, but the mining industry could be hit hard once the carbon tax reaches $30 per tonne. For a large mine, the carbon tax could add up to $4 million per year to costs. That cost increase might be absorbed now because of high commodity prices but what's going to happen when commodity prices go down? Carbon taxes will probably mean a slowdown for this industry. Less growth in the mining sector could mean lower carbon emissions, but it also means fewer high paying jobs.

Waste of resources

Here's something else to drive home how misplaced this whole policy is.

The government is spending $46 million over the next three years on its climate change secretariat. (also a $62 million contingency fund) About $15 million of that will be spent on selling us on the global warming spin.

In the meantime, we've had more than 500 boiled water advisories in this province so far this year.

To get a boiled water advisory, the level of E-Coli in the water has to be really high. In plain language, that means - sorry for this, but that means there is poo in the water. This is our own version of Montezuma's revenge.

Yet we are spending millions on what is effectively, hot air.

Conclusion

Do we want to sacrifice our standard of living and quality of life for a strategy that probably won't achieve its goal and could actually hurt the environment if we are made worse off?

Since 2001, the B.C. economy has been booming, we have a labour shortage, so jobs have been plentiful. That may soon change.

We care about the environment but spending billions of dollars to reduce man-made CO2 will do nothing to improve human health.

Taxing people to get them to change their behaviour will have limited effect on ghg emissions.

Businesses that cannot reduce their emissions or pass their cost increases on could move to other jurisdictions that don't have carbon taxes.

Do we really want to exacerbate the economic downturn by adding more taxes and driving businesses from the province?

Human beings can do little to influence global temperatures.

We can, however, clean up the air. Remember, the air today is cleaner than it has been in decades in Canada, and centuries in the UK.

Will a carbon tax work? C02 emissions continue to rise in Europe and they will here too, that is, as long as we have manufacturing in the province.

The science is far from settled on this issue. Gordon Campbell – cheered on by radical environmentalists and some business groups -- has no mandate to impose this policy. Alarmist propaganda notwithstanding the earth is not melting, but our standards of living soon will. Let's learn from the mistakes of Europe and stop this green madness.

By: Maureen Bader
Posted: June 19, 2008
Topic: British Columbia

Contact the regional director Jordan Bateman for further information.

Type: Related

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