"Dion's credibility shot on carbon tax"

Lorne Gunter viciously rips into Dion over his Carbon Tax idea in today's Edmonton Journal.

"Dion's credibility shot on carbon tax"
Don't believe it will be revenue-neutral, and don't believe it won't hurt producers

Lorne Gunter
The Edmonton Journal
Friday, May 16, 2008

For at least two years now, Liberal Leader Stephane Dion has been clear -- emphatic even -- there will be no carbon tax if his party wins the next federal election with him at the helm.

Of course, he was being disingenuous about that sometimes. For instance, last spring he suggested that instead of a carbon tax, the country's 700 largest carbon emitters might be charged a carbon fee.

On a practical level, there would be no difference. A gouging, punitive, regressive tax by any other name would still be a gouging, punitive, regressive tax.

Still, on a dozen or more occasions, Dion has pledged never to introduce a carbon tax.

In June 2006, during the first Liberal leadership debate, Dion scoffed when Michael Ignatieff said a carbon tax "would do more to address climate change and help us be good stewards of our environment than any other measure." Then, as now, Dion was a passionate defender of the Kyoto accord and even he rejected the notion that a carbon tax could help reduce emissions to the levels mandated by the UN's global-warming accord.

Weeks later, when he released his campaign platform it referred to a tax on the production or consumption of fossil fuels as "simply bad policy."

Also, Dion told the National Post's editorial board in November 2006 (just weeks before he was selected as Liberal leader), if he ever became prime minister he would not even consider a carbon tax, because "for Albertans it's a non-starter."

He claimed in the Globe and Mail to have "always been against" a carbon tax. He had "other ways" to achieve emission reductions -- mostly investment in new energy-saving technologies and tax incentives for individuals and businesses that reduced their carbon footprints.

Dion did say he wanted to establish a link between Canadians' pocketbooks and the environment -- between "your wallet and the planet," in his words -- but not by taking money out of those wallets, but rather by fattening them up with government cash.

Within weeks of becoming Liberal boss, Dion rushed to Alberta to assure the Journal's editorial board, among others, that there would never be a carbon tax if he had his way.

I wrote at the time that I didn't believe him. His plan, regardless of what he was going to call its components, would hit Alberta disproportionately hard and as such amounted to a carbon tax. Dion wrote our editors insisting "the plan I will reveal soon to decrease Canada's industrial greenhouse gases will not include a carbon tax. I have said that I will be the best partner for Alberta and I mean it."

Even this past winter, speaking to an Alberta audience, Dion assured the crowd he had two "bottom lines": "there will be no carbon tax" and the profits earned by Albertans in the current energy boom "will stay in Alberta."

So, of course, what has Dion proposed this week? A carbon tax.

Sure, the Liberal leader says his I-will-never-impose-a-carbon-tax tax will be revenue neutral, meaning for every dollar raised by his tax another tax will be lowered by the same amount. But I think he's shot his credibility on the carbon-tax front. So excuse me, at the risk of provoking him to write another "best partner for Alberta" letter to my editors, I don't believe him.

Promising that a new tax will be revenue-neutral has about the same credibility to begin with as a realtor's pledge that your new home is just 15 minutes from downtown or a carmaker's promise that your new SUV will get 20 kilometres a litre in the city and 30 km on the highway. But coming from Dion, the vigorous opponent of carbon taxes, the pledge of revenue neutrality is even less believable than usual.

Also, Brian Mulroney pledged that the GST would be revenue-neutral, and we all know how that song and dance ended.

The British Columbia government made a carbon tax the focal point of its spring budget and promised it would raise no new revenues. But the Canadian Taxpayers Federation estimates that once all the rebates for low-income residents are paid out and administrative costs are factored in, middle- and upper-income taxpayers could pay $1 billion more in taxes each year than they do now.

And even if Dion's carbon levy is revenue neutral, will it be regionally neutral? Will it be imposed on consumers --and thus felt all across the country -- or will it be imposed mostly on producers and thus be mostly born by Alberta, B.C. and Saskatchewan, and possibly Newfoundland and Labrador?

If Dion follows the long tradition among Liberal leaders in their treatment of Alberta, we know the answer. Electoral reality will take precedence over regional equity. He will see few votes to be won here and many to be gained elsewhere by championing a tax that hurts Alberta and the other producers and -- blink -- the tax he would never impose, in part because he said he didn't want to hurt Alberta, will be dumped on our backs.

© The Edmonton Journal 2008