EN FR

Beer drinkers cast doubt on carbon taxes

Author: Todd MacKay 2018/06/26

This column first appeared in the Winnipeg Sun and is now free to reprint.

Manitobans escaping the city and heading to the lake need two things: a full tank of gas and a cold case of beer.

Carbon-tax advocates want to change the gas-tank-filling part of that summer tradition. They say increasing the cost of fuel with a carbon tax will reduce consumption and lower emissions. But that cold case of beer in the trunk tells a different story.

When Manitobans buy beer, about 47 per cent of the bill is tax. In fact, provincial beer taxes have soared by 32 per cent since 2010. If a higher tax rate automatically leads to lower consumption, enjoying a brew by the lake should be a rare luxury.

Manitobans bought 80 million litres of beer in 2010, according to Statistics Canada. In 2016, they bought 76 million litres of beer. So, while beer taxes soared, beer drinking barely dipped downward.

Even that blip probably isn’t due to taxes. While Manitobans dialed back their beer drinking by a few percentage points, they made up with it with more wines, spirits, ciders and other alcoholic beverages. Total alcohol consumption in 2010 was 100 million litres and in 2016 it was 101 million litres. And taxes on many of those non-beer drinks are even higher than they are on beer.

Let’s be honest, a beer is a discretionary nicety that Manitobans could, begrudgingly, live without, but what impact would a carbon tax have on families filling up their fuel tanks?

Manitobans already pay about 30 cents per litre in taxes on gasoline. Premier Brian Pallister is planning to impose a carbon tax that will increase the price at the pump by about 5.3 cents per litre. The provincial government refuses to release any projections showing whether a carbon tax would actually make people use less fuel.

However, British Columbia has tried the carbon tax experiment and the results are readily available.

BC imposed a carbon tax in 2008. It now costs drivers about 7.8 cents per litre. So, what’s happening to consumption on the West Coast? Drivers used 5.3 per cent more fuel in 2015 than they did in 2011.

BC emissions also went up.

“[BC] emissions were higher in 2015 than in 2010 and have risen in four of the last five years,” stated the Sierra Club in a release in early 2018.

It seems a carbon tax won’t stop people from driving to the beach or taking their kids to hockey practice. But fueling up is about more than discretionary diversions, it’s an absolute necessity. People need to drive to get to work. They need to drive to get groceries.

The Sierra Club’s solution is to make carbon taxes much higher. Internal federal documents brought to light by access-to-information requests show that carbon taxes would have to soar to about 60 cents per litre to meet emissions targets. But, even at current levels, carbon taxes place a heavy burden on taxpayers.

When BC first started collecting a carbon tax, the government promised to reduce other taxes by the same amount. Instead, the Fraser Institute concluded the carbon tax cost taxpayers $865 million. Now the BC government is increasing the carbon tax without making corresponding cuts to other taxes.

The Manitoba government says its carbon tax won’t increase the overall tax burden. But this year’s budget projected an overall tax hike of $118 million due to the carbon tax. And the government has no detailed plan to keep taxes from weighing down Manitobans in the future.

Carbon taxes won’t stop Manitobans from driving up to the lake any more than liquor taxes stop Manitobans from tipping back a cold one by the campfire, but both cost taxpayers millions.


A Note for our Readers:

Is Canada Off Track?

Canada has problems. You see them at gas station. You see them at the grocery store. You see them on your taxes.

Is anyone listening to you to find out where you think Canada’s off track and what you think we could do to make things better?

You can tell us what you think by filling out the survey

Join now to get the Taxpayer newsletter

Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

Join now to get the Taxpayer newsletter

Hey, it’s Franco.

Did you know that you can get the inside scoop right from my notebook each week? I’ll share hilarious and infuriating stories the media usually misses with you every week so you can hold politicians accountable.

You can sign up for the Taxpayer Update Newsletter now

Looks good!
Please enter a valid email address

We take data security and privacy seriously. Your information will be kept safe.

<