Rethinking Lifestyle

We’ve had unprecedented wild fires, not only in Alberta, but also BC, the NWT, northern Quebec and New Brunswick. These fires have not been limited to Canada. Significant wildfires occurred in Spain, Greece, Italy and Portugal. And of course there was Maui. Lives were lost. June has been the hottest June on record, July has been the hottest July on record. The climate crisis real.

And we’re having an election! In October. One would think, given such circumstances, that the political parties would be offering various policies to either reduce global warming or encourage resiliency, so we are not as affected by the climate crisis. But from the main political parties – nothing. Listening to their campaign rhetoric, the climate crisis doesn’t exist. The federal Liberals are implementing one response to the climate crisis, the carbon tax, but it is very timid, and is not resulting in much behaviour change. Yes, one party, the PC party, is saying it will terminate even that timid attempt to change our behaviour.

A progressive tax system would encourage good behaviour and discourage bad behaviour. We have two such taxes. One is the tax on alcohol and tobacco, and the other is the carbon tax. The other taxes we have do the very opposite. Our current tax system encourages consumption. At the risk of over simplification, consider two companies, each mines a tonne of iron ore. One company manufactures a cheap component with that iron ore and the other company, by being more ingenious and efficient, is able to manufacture a much more expensive component. Who will pay more tax? The company building the more expensive component! Because it makes more money with the ore it mines, and currently we now mostly tax income and profits. Our economic system rewards efficiency, but our tax system does not. Our tax system is based on income, not consumption.

Yes, our PST and our GST are consumption taxes, and they are a move in the right direction. Food is exempt from the GST so lower income families don’t pay GST for one of their significant expenses. In the European Union countries, the GST is 20%.

But we can do much better than that. We need to find ways of living without spewing CO2 into the atmosphere, contributing to the Climate Crisis. We also need to take steps to preserve fossil fuels for our children and grandchildren. Fortunately these two objectives coincide. How can we create incentives to move in that direction? By placing a tax on the oil at the wellhead. This would be easy to collect, and allow us to reduce other taxes. Of course the oil company would pass that tax on to the end user who would be incentivized to consume less.

Yes, this would create hardship for lower income families, but the Guaranteed Minimum Income as proposed by the late Conservative senator Hugh Segel, would alleviate most of that hardship.

Unfortunately neither of the two main parties seem to be looking at that. The Green Party is. Look at their website to get details.