Happy Canada Day; Time for a New Tax

Canada Day was the last official day of my 2-week vacation. I spent the morning doing laundry and cleaning up after the Scandinavia trip. Dan has been gone for a week, so most of our plants are dead. I tried nursing them back to life, but I think all of our herbs are dead except the rosemary and the chives.

The afternoon was spent enjoying the beautiful weather here in Vancouver. I spent some time at Kits Beach, enjoying the sun and watching all the beautiful people. Then I biked down to Granville Island to check out the official festivities. It was jam-packed with people. It looks like a lot of people biked since I couldn’t find anywhere to lock up my bike. There was also a huge line-up of cars trying to get on the island. I’m glad to see the new carbon tax in BC hasn’t changed anyone’s dumb driving habits. I never understood why anyone would try to drive onto Granville Island on Canada Day, even when gas was cheap. It’s always jam packed with people and parking is impossible to find.

Canada Day at Kits Beach  Canada Day Suntan  Canada Day Basketball  Line-up of Dumb Cars

Speaking of the carbon tax, July 1 was the first day it came into effect, and it has been the topic of much conversation, especially in the news and in blogs. Here’s my opinion.

I think the carbon tax is a good idea for a number of reasons:

  • It puts a price on polluting.
  • It discourages people from driving.
  • It has shifted the climate change debate from the science to solutions.
  • It financially rewards people like me who don’t own a car.

That said, I think it will be largely ineffective at reducing carbon-based emissions in BC. Why?

  • Gas prices have naturally risen from $1.10/litre one year ago to $1.47 today (the gas tax has pushed that up to $1.50). And yet people aren’t abandoning their cars.
  • They’re not abandoning their cars because of a lack of transit options. Translink knows there is a latent demand for transit in Vancouver – “Every time TransLink adds new buses and SkyTrain cars, Hardie said, they fill up with passengers”.
  • And yet their isn’t funding to buy more buses. The revenue from the gas tax goes directly to reducing other taxes. If even some of it went to expanding public transit, it would have a noticeable impact. Instead, most people will use the tax savings to offset the higher gas bill.
  • Consumers are driven by habit and controlled by large advertising budgets. Convincing people not to drive is not an easy sell. Kind of like convincing people not to buy bottled water. That should be an easy sell since bottled water costs $2-$3/litre and tap water costs $0.0005/litre, and yet it’s not.

It’s interesting to see how the political parties are spinning this issue. The Liberals (right-wing party here in BC) are responsible for the gas tax, so are trying to sell it to the public. They have 3 main talking points:

  • “2.4 cents/litre is insignificant, you won’t even notice it.”
  • “It’s revenue neutral, you’ll get the money back on your income taxes.”
  • “It will help the environment because it will change people’s behaviour and discourage driving.”

I think the first 2 are rather contradictory with the last point. If it’s insignificant and will be offset with other tax savings, how is it going to change behaviour? It hasn’t even altered the behaviour of the government that is implementing it. The Liberals are still intent on pouring billions of dollars into highways expansion instead of transit infrastructure.

The Liberals are in a tough position here, because a lot of people are rather pissed about the gas tax. Most non-environmentalists and suburbanites are Liberal supporters and many wonder if a gas tax is prudent when prices are already going through the roof.

The NDP has tried to capitalize on the angst with an “Axe the Tax” campaign. It’s blatant political opportunism, since the NDP has supported a carbon tax in the past and still kind of supports one (their exact position is tough to nail down). Enough Canadian governments have been defeated because of new taxes, so I guess they see an opportunity. Kind of like the Liberals who swept to power in 1993 by promising to axe the GST, and then keeping it.

Ideally, I would like to see the carbon tax kept, but some of the revenue diverted into green programs – capital funding for public transit, more buses, and green energy (like solar and wind).

One comment

  1. I was surprised that BC implemented the carbon tax, maybe because I’m used the US politics now and I can’t imagine anything that smells like a tax hike passing?
    As for the effects of the gas prices, I’ve noticed the train got a lot busier since the year began, and I’m seeing a lot of new faces on the bike car. (you start to know all the bike/train commuters after a while… they are a loyal bunch) A few said that they bought a bike recently and were going to start commuting by bike and train due to gas prices… which is kind of encouraging. Caltrain has the same problem as Translink though, especially regarding bike capacity.
    Although I’m quite happy to see that the market is working, I feel it’s unfair that as gas prices go up, only the rich (a subset of which are the ones who do city planning, pass laws, etc.) can afford to drive when the country is developed such that I can almost understand the argument that some people need a car.
    In a perfect world public transit would work, trains would be on time and frequent, etc.. … I do appreciate the highways from time to time; they make bike touring much more comfortable πŸ™‚
    The BC tax shouldn’t be referred to as the “gas tax” though. I think (once again maybe I’m too used to the US by now…) gas is an emotional issue for many people, and have knee-jerk reactions when the Gov’t wants to tax their driving. “Carbon tax” is accurate but unclear, but with some knowledge one would relate “carbon” with “bad for the environment”, and I most people would agree that protecting the environment is good (especially when their children are involved).


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