Why the Carbon Tax Doesn’t Work For Me

There are mainly two types of taxes, the first kind is what we pay from income or otherwise profits to cover the cost of living with the conveniences we have as a society, things like roads and other infrastructure, law enforcement, health care, education, etc. The other type of tax is to persuade behavior change or at least help cover the costs inflicted on society by some forms of negative behavior. Taxes on cigarettes would be an example of this, or the new instituted carbon tax in Alberta and or Canada. The idea behind the carbon tax is to get Canadians to reduce their carbon footprint and to raise money for so called Green initiatives. Now I’m all for reducing carbon footprints and all, but this carbon tax is going to be far worse then a complete failure and let me explain the reasons why and finally how I would do this.

The biggest problem is that this tax comes in as an upfront cost such that everything Canadians do will have an increase in costs as this tax will be passed onto consumers. This has a two-fold impact, first it will teach Canadians to buy products not made in Canada as those products will be cheaper as they don’t have this extra cost to pass onto the consumer and second it will handicap Canadian businesses trying to complete in the world market. So, you will see more Canadian Companies closing, more Canadians unemployed and increased trade deficits as Canadian purchases of foreign carbon tax free product increases. Neither of these are acceptable, but why does a tax on say cigarettes work, but the carbon tax won’t. In Canada you can only buy cigarettes that are taxed, everything else is illegal the government spends a great deal of money and resources to ensure that non-taxed cigarettes are not available in Canada, this doesn’t apply in the case of the carbon tax. I should also point out that Canada only exports a tiny amount of tobacco (0.4% of the world's tobacco exports, about a $100 Million worth) as tobacco is not an industry that Canadians really want to be in.

But we really want to be green and so how can we do that. First, I’d offer tax reductions for greener products which would enable those products to have a lower consumer cost and use that as the encouragement to switch consumers to greener products. Second, use on profit/income taxes to fund green initiatives, we do this for many other Canadian feel good projects. This way everyone gets to keep their job and we remain a competitive player in the global market and can use the profits from success to drive further success in green initiatives. Anything that kills the economy will also kill the desire and funding for going green, so carbon tax is completely non-sustainable in terms of making Canada Green and will fail horribly. Only a balance between a healthy vibrant economy and green initiatives will produce the long-term green objectives of Canadians.

China is a very interesting country.  They are the world leader in a number of so call green technologies and initiatives.  #1 in wind power generation (and wind power manufacturing), #1 in solar power generation (and solar power manufacturing), #1 in electric car manufacturing, #1 in electric bus and truck manufacturing, #1 in lithium ion technology and manufacturing, and the list goes on and on because China is the world’s largest investor in renewable energy.  The Chinese understand change costs money, big money, huge money and that money is created by people working to generate the technology and money needed to fund the changes they want to have.  China is not the same China people think it is from 50 years ago, they are progressing at outstanding rates because they have the resources and money to drive change.  They are the model for change as they are walking the talk if you believe that becoming a leader in green technologies is what is needed to change the world.  Our Carbon Tax will in fact hinder Canada’s progression to green by limiting the money and resources required to drive change, so scrap this counter productive tax now before it is too late.

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