The Edmonton Journal
Wed 27 Aug 2008
Page: A19
Section: Ideas
Byline: Grant Mitchell
Source: Freelance
The following article by Liberal Senator Grant Mitchell is the first of an occasional series on environmental policy that will appear in these pages in coming weeks in anticipation of a federal election.
On Saturday, Edmonton-Leduc MP James Rajotte, chair of the Commons committee on Industry Science and Technology, will sketch out the Conservatives’ approach to the country’s environmental challenges.
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Stéphane Dion is offering us the kind of politics that we say that we want. He has taken a stand on the Green Shift to deal with the climate-change crisis in a way that no self-serving politician would ever do. He has accorded Canadians and Albertans the level of respect they deserve for their intelligence and thoughtfulness.
The Green Shift premise is this: Let’s stop taxing those things we want to encourage like income and profit, and start taxing those things we must discourage, like greenhouse gases (GHGs).
The money raised from GHGs will be used to reduce income and corporate taxes, create further tax benefits for families, provide additional support for low-income Canadians, and help rural and Northern Canadians meet their particular fuel demands.
Canada’s auditor general will confirm that the shift will be revenue neutral, in an annual audit required by law.
It seems so anachronistic, so 19th-century, to continue to tax income and profit, when there is a far less acceptable output in our economy to tax.
A DAUNTING CHALLENGE
Our policy reflects the severity of the climate-change crisis. If you doubt climate change, just consider the increasingly violent weather events on the news every night; the pictures of melting ice caps and glaciers; the advance of the pine beetle; the melting permafrost in the North; rain in December in Inuvik.
Despite the skeptics, there is unprecedented, peer-reviewed, and international scientific consensus on the conclusion that climate change is occurring and it is caused by human activity.
Those opposed to the Green Shift try to frame the debate as if there are two sets of choices.
First, they imply that there is a choice between doing something and doing nothing; that, if governments do nothing, economic life will go on unchanged. However, apart from the economic havoc that climate change will wreak, even if we do nothing there will be huge economic pressure from a world that believes climate change is occurring, and that will change its market decisions accordingly.
In response to those who say they do not believe climate change, we are not talking religion here; we are talking business.
Recently, the U.S. Congress passed a law that will prohibit U.S. government agencies (like the army) from buying energy products derived from oil that produces more GHGs in its production than conventional oil. Oilsands oil produces three times as much GHG emissions. A conference of big-city U.S. mayors recently passed a resolution calling for the same ban.
For those who think our friendship with the U.S. would prevent this, consider the value of our friendship in the BSE and softwood lumber issues.
Second, those opposed to action imply there is a choice between a party that will do something and one that will do nothing. But that is not the case. There will be a choice between Dion’s Green Shift and Stephen Harper’s cap-and-trade system which the prime minister says will reduce GHGs by 20 per cent of 2006 levels by 2020 — a target that in no way approaches the levels demanded by the science.
The Green Shift may raise costs to consumers, and so will Harper’s cap and trade.
But, the Green Shift will raise money from GHGs, which will be shifted to tax cuts and other payments to help Canadians deal with any cost increases.
MONEY IN CANADIANS’ POCKETS
In the Liberal plan, income taxes will be reduced by 1.5, one and one percentage points on the lowest three income tax brackets respectively.
Families will receive a child tax benefit of $350 per child annually, in addition to existing child benefits, whether or not they pay income taxes. That is a total annual benefit of $1,326 for a family of four with two $50,000 incomes.
A new guaranteed family supplement will provide up to $1,225 to low-income families. Families with incomes up to $26,000, rather than $21,000, will keep all of the national child benefit supplement. The working income tax benefit will be enhanced.
Low-income individuals with disabilities will receive the disability tax credit, even if they pay no income tax.
Rural residents will receive an annual green rural tax credit of $150, even if they pay no income tax. Northern Canadians will receive this $150 too, plus a boost to the northern residents deduction.
The employment tax credit will increase to $1,850, providing an additional $250 to people earning less than $50,000.
Low-income seniors will receive $600 in additional guaranteed income supplement funding.
Small business and corporate taxes will go down by one percentage point. Businesses will be able to write off investments in green technologies faster. The current research and development tax credit will be 25-per-cent refundable.
LITTLE BUREAUCRACY NEEDED
The Green Shift can be implemented right away with little bureaucracy. It introduces incentives to the market, allowing business and consumers to maximize their interests without direct government intervention.
It is argued that there will be a drain from Alberta to the rest of the country. But Alberta may actually have an advantage over other provinces in reducing CO2 emissions because the vast majority of our emissions can be captured from our relatively few oilsands and coal-powered electricity plants. We do not have to develop a multitude of technologies to apply to a multitude of different CO2 emitters. And, Premier Ed Stelmach has announced a $2-billion initiative to finalize the technology to capture oilsands’ CO2 emissions.
When we begin to capture the CO2 from our oilsands plants, suddenly we may well be producing considerably less CO2 than many other provinces, raising the likelihood that Alberta might actually be the recipient of transfers. It is within our capacity to control this ourselves. Industry just needs leadership to “kick-start” the implementation of mitigative measures.
INDUSTRIES ARE TAKING ACTION
Significant industries have already beaten even Canada’s Kyoto target GHG emissions of six per cent below 1990 levels.
The Canadian Petroleum Products Institute member companies, accounting for 80 per cent of Canadian refining, much of which is done in Alberta, have reduced their emissions to 7.5 per cent below 1990 levels, while producing 20 per cent more product.
The Forest Products Association of Canada membership has reduced its carbon footprint to 44 per cent below 1990 levels — seven times Canada’s Kyoto target.
The Canadian Chemical Producers’ Association members have reduced to 56 per cent below 1990 levels, nine times Kyoto. The Canadian Manufacturers and Exporters are at 7.4 per cent below 1990 levels, while increasing productivity by almost 50 per cent.
The Conservatives argue that climate- change initiatives will hurt the economy. Yet, they never say that spending billions of dollars on tanks, helicopters, and military transport planes will hurt the economy.
IT’S BEEN DONE BEFORE
Canadians completely restructured the economy to win the Second World War and that did not hurt the economy. In fact, it built a modern industrialized economy that has sustained one of the best standards of living in the world for the last 60 years.
Attacking climate change will be the next industrial revolution. Continuing to do nothing is what will hurt our economy.
Many major environmental efforts, like dealing with the impact of CFCs on the ozone layer and with acid rain, have encountered dire warnings of economic disaster, lost jobs, an “acid rain recession,” or industries going under. None of this ever happened.
Major environmental initiatives are generally accomplished with much less cost and in much less time than originally anticipated.
There are always reasons why great challenges are resisted. Weak leaders have a litany of them. Great leaders find ways to meet them.
Grant Mitchell was appointed to the Canadian Senate in 2005. He was leader of the Alberta Liberal Party from 1994-1998