An accountant read a nursery rhyme to his toddler and said, “No Sweetheart. Little Bo Peep wouldn’t receive a tax rebate for losing her sheep, but I like the way you think.”
Traditionally, you receive a rebate after you pay for a product. I’ve never heard of a rebate where you are reimbursed beforehand, but that’s exactly what will be taking place in the next few months.
Saskatchewan residents will be the recipients of Climate Action Rebates when they file their 2018 taxes, even though they won’t be paying carbon taxes at the pumps until April of this year. The federal government, not only feels it makes economic sense to pay a rebate before people pay the tax, but they are calling the rebate an ‘incentive’. According to them, the rebate is extra money to give people an incentive to make those cleaner choices. So how will ‘you’ spend your incentive?
Don’t forget, the “extra money” will be needed to pay the “extra tax” at the pumps when April arrives. Unless, of course, Saskatchewan residents make those “cleaner choices”.
Cleaner choices would be driving less, which is difficult during our cold winters, and in rural Saskatchewan where people have to drive significant distances for everyday necessities like medical appointments, children’s activities, and to get to work. Or there may be fewer people driving pick-up trucks and SUVs, but for those of us who are already driving 4 cylinder vehicles, that “cleaner choice” has already been made.
But let’s assume for a second the Climate Action Rebate will be an effective incentive to make cleaner choices. If we follow that rational, then the Goods and Services Tax Rebate should be an incentive for people to somehow pay less GST.
Dwight Doering, president of TaxPro Consultants Ltd., explained that the rebate is determined by an estimate of how much households will be spending on carbon taxes. “Ninety per cent of this carbon tax is going to be returned to individuals through this climate action incentive on the their tax return.”
The first question that comes to mind is, “Why spend all the time, resources and money to administer this tax when you’re going to return ninety percent of it back to the people who paid it in the first place?”
Dwight Doering supplied his own answer to that question, “It’s an election year, they’re bribing us with our own money.” Although no one is going to refuse receiving the rebate, it’s doubtful whether it will serve as an effective bribe or incentive to make cleaner choices.
The Environment Minister for Saskatchewan said the carbon tax will increase power and energy bills for people in the province. How will Saskatchewan residents make cleaner choices in winter? Perhaps they could lower the temperature on their energy efficient furnace and wear outdoor winter attire indoors?
According to Scott Moe, for carbon pricing to be effective, it would have to be accepted worldwide, with heavily emitting countries like China and India coming on board. Until that happens, I’d venture to guess the pros of carbon pricing in Canada will be greatly surpassed by the cons.
However the Honourable Ralph Goodale rationalizes that “Saskatchewan has faced damaging weather exacerbated by climate change – droughts, wildfires, poor harvests, which has added up to hundreds of millions of dollars in costs.”
What he doesn’t explain, is how paying a tax begins to solve any of those situations. Just as an aside, wildfires in the province often begin because of human error, combined with our typical Saskatchewan wind.
It seems just and fair for our government leaders to take the lead on this issue. However, Canada flew 127 government delegates to the Climate Change Conference in Katowice, Poland in December of 2018, to talk about using less energy. More than 22,000 people flew (not exactly a cleaner choice) to Poland, including lobby groups, youth delegates, environmental activists and 1,541 designated media.
Technically, our government did make a cleaner choice, in that they sent 127 delegates to the 2018 conference, compared to the 300 delegates they sent to the 2015 climate change conference.
Doering considers the rebates little more than a redistribution of wealth. It’s been noted that the more developed nations are forced to reduce their fossil fuel use, de-industrialize and pay money to developing nations like China, the less developed and wealthy they will become.
Winston Churchill put it this way, “The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery.”
But at the end of the day, it’s certain we’ll all find it equally easy making choices on how to spend our “incentives”.
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