Now Is Not the Time for Another Gasoline Tax
(January 21, 2015) While up in Sudbury this week a question I frequently got asked is what a provincial carbon tax would mean for Ontarians. The answer is increased costs on all kinds of things, including a potential 7 to 10 cent per litre increase in gasoline prices, and increases on hydro bills, heating bills, groceries, prescription medication, clothing and so on.
Defined as a tax on emissions aimed at reducing the production of greenhouse gases, a carbon tax would allow the government to put a price on each tonne of greenhouse gas emissions.
The perceived benefit of a carbon tax in theory is environmental, but according to Environment Canada, our entire country only contributes 1.8% of the world's greenhouse gases. Not to mention that implementing a tax does not necessarily lead to significant reductions in carbon emissions.
The practical result of a carbon tax is that the cost to produce and transport every product in Ontario will increase, particularly impacting rural areas where people don't have an option to stop driving.
In British Columbia, the only province in Canada to have a significant carbon tax, industry complains of the impact. For example, cement mixers claim the tax has resulted in the loss of a third of their market share to countries like China, grain producers estimate the average farmer pays an extra $4,300 in tax, and the price of gasoline has increased by an extra seven cents per litre. In BC, the government employs a revenue neutral commitment with their carbon tax, which ensures any money generated from the tax cannot be used to increase provincial revenues, thus creating tax breaks. This still isn't optimal and it certainly won't be the case in Ontario no matter what the Liberals say.
Another example is Australia. They recently repealed their carbon tax after introducing it only two years ago. The tax was quickly rejected after energy bills skyrocketed across the country. In its place Australia's Prime Minister, Tony Abbott, promised a $2.57 billion industry incentive fund to encourage industry to use cleaner energy.
So why is Kathleen Wynne's government, as she puts it, "actively considering" a carbon tax? The answer is simple--to make up for years of the Liberal's gross mismanagement of Ontario's finances. While gas prices are low, Kathleen Wynne's government sees an opportunity to sneak in a new tax hoping you won't notice.
Kathleen Wynne's intentions have less to do with the environment and more to do with taxing Ontarians in the name of environmentalism. Sound familiar?
It is the same thing the Liberals did with "green energy". Ontario homeowners are now paying almost $700 more a year under the Green Energy Act without any significant environmental benefit.
We need to fight climate change, but we need to do it in a balanced way. A massive new tax with no guarantee that the funds will go to fighting climate change will only hurt Ontario families while failing to address the problem.
Practical solutions to reduce emissions can range from conserving energy to investing in public transit and preserving green space in both urban and rural areas, not a tax that Ontario families and businesses can't afford.
The Liberals have already raised tax revenues in Ontario by $30 billion with their introduction of the health tax, HST and Eco Fees to name a few measures. These were among the largest tax increases in Ontario's history, yet Ontario's debt has become the highest in the country and the deficit is more than all other provinces combined.
To build up Ontario's economy, the government has to set priorities and create an environment that is conducive to growth. With more and more companies moving south or closing down operations altogether it's clear that this government isn't doing that.
If the Liberals were serious about balancing the books, they would get their fiscal house in order. Yet another tax implemented by this wasteful government isn't going to do that. The Liberals have no justification for another tax grab.
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