An oil carbon tax, to be or not to be, that is the question

Posted January 20, 2015

A recent column in the Mercury presented a case for creating a carbon tax in Ontario.

The writer, a reformed peak oil believer, makes the case that with oil now priced so low, it is the perfect time to fire up another tax on already overtaxed Ontario citizens.

He pointed out how well the seven per cent per litre carbon tax at the pump works in British Columbia. The proceeds are returned to taxpayers with matching reductions. He claims its revenue neutral. He also said that fuel consumption in B.C. has dropped by 16 per cent while it has risen by three per cent in the rest of Canada.

Now for the rest of the story.

The writer fails to define what kind of fuels he uses in his B.C. example against the rest of Canada. He makes no reference to natural gas, a growing important source of energy. He is focused on fuel for automotive vehicles that use gasoline as fuel.

But what about trucks, buses, locomotives, power plants, aircraft, industrial plants, ships, boats, residences and businesses using oil or gas fuels for heating?

He assumes that oil in all its refined forms is responsible for global warming. The theory is, if the nations of the world reduce the dependence on oil and gas, the atmosphere will clear. Planet earth will be able to prevent the disastrous events that will cause oceans to flood coastal areas and severe weather conditions, currently being blamed on global warming.

Has the writer considered the amount of carbon gas that is spewed daily by more than 200 active volcanoes around the world?

What is happening is a natural evolution of planet earth. For millions of years it has constantly changed. There is no doubt that controlling petroleum-based carbon emissions will help to slow global warming but it is not the only cause of the changing global atmosphere.

Is the alleged reduction in B.C. due to introducing alternative energy sources such as wind farms and solar system arrays? The devil is always in the details.

In Ontario, successive provincial governments controlled by the Ontario Liberal Party have introduced sustainable energy projects to replace coal-fired power plants. Private corporations have developed almost all of these wind and solar farms. Under a government scheme, it guarantees them to charge twice the water and nuclear cost of power generation for 20 years.

One of the negatives of this development is that they are generating too much power and it is sold to other jurisdictions, chiefly in the U.S., at below cost, fire sale prices. The problem is you cannot store unused electricity. The provincial government has proposed a 10 per cent across the board increase in electricity in 2015 with further increases planned in the next three years.

This has made Ontario power generation the highest cost of any major jurisdiction in North America. Just look carefully at your Ontario Hydro bill at the list of charges, other than electricity, you have to pay, including the debt reduction charge to pay for mismanagement of Ontario Hydro in previous years. That stranded debt is $35 billion and there is no sign that it is being reduced because the government won’t tell you. Where is the money going?

It’s akin to paying twice for power, even power used years ago.

So when the Mercury columnist suggests that Ontario citizens pay more taxes for fuel consumption, why would anyone in their right mind give the Wynne provincial government control of such a cash stream?

The record of the McGuinty and Wynne governments is best described as being disastrous. Throw in the $12.5 billion annual deficit and you don’t have to hold an MBA degree to figure out the cost, every year of carrying that deficit, plus the highest debt in the province’s history.

Those costs do nothing for the citizen’s of Ontario. Until the Wynne government stops spending more than it is taking in, the problem will not go away but grow exponentially.

When the Ontario finance minister states that the $12.5 billion deficit will be eliminated by 2017, he sounds like the man from La Mancha, Don Quixote, and the impossible dream.

 

 

 

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