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Canada's newest tax

By Steven Martinovich

The Professor(April 18, 2005) Canadians finally -- again -- learned how much the implantation of the Kyoto Protocol will cost. Although the Martin government set aside $5 billion over five years in their budget just two months ago, last Wednesday Canadians were told the climate change treaty's costs would actually hit $10 billion over seven years.

The goals of the treaty are fairly but deceptively simple: we have pledged to reduce carbon dioxide emissions to six per cent below 1990's level by 2012. That doesn't sound like difficult until you learn that Canada's emissions have risen 30 per cent since 1990. That of course means that to meet Kyoto's goals we'll have to make serious cutbacks and our lives will become more expensive.

Much more expensive it turns out. The Canadian Taxpayers Federation announced earlier this year that they estimate it will cost $3,000 per Canadian household annually by 2010 to implement the treaty. That sum takes into account expected price increases, wage reductions, job losses and a fall in average annual real net household income.

"The environment minister today admitted the only way to meet Kyoto targets is to subsidize business and buy 'hot air' from Russia," said CTF Federal Director John Williamson on Wednesday, referring to an emissions credit market. "In other words, we will pay Russians so we may heat our homes in the dead of winter. Ottawa obviously has too much of our tax money to spend if it can propose and enact such harebrained policies."

Of course, that's not what we're being told by the federal government. Outside of their inane One Tonne Challenge, which helpfully urges Canadians to take public transit, faster showers and install storm windows, we're not really sure how the federal government plans to make the enormous cuts in energy consumption necessary to hit our targets. Whether you're opposed or in favour of Canada's support of the treaty, one thing is apparent: the government still has yet to release a truly detailed plan.

And yet the government apparently expects Canadians to embrace the Kyoto Protocol as a good thing. This comes despite the fact that its cost keeps rising and we're little closer today then we were when we signed on in knowing what burden we're expected to carry. The plan, such as it is, allegedly pushes the country towards a low-carbon economy -- a laughable proposition to begin with -- but will be revised constantly. It's quite possible that from year to year we won't know what the federal government will mandate.

A few years ago the federal government pegged the cost of the treaty at as much as a 1.5 per cent impact on the country, which means as much as $16.5 billion from a $1.1 trillion economy. Along with the direct economic cost, it was also predicted a loss of 200 000 jobs, mostly in Alberta and Ontario, would take place. Those might just be numbers to you but imagine a world where gas prices jump as much as 80 per cent, electricity costs double its current rate or natural gas prices rise 60 per cent.

Every Canadian-made good or service will increase in price, from the bread you buy to the car you drive. The average Canadian will be materially poorer in seven years compared to today and the economy will reflect that. This is the reality of implementing a treaty that literally asks us to step back over 15 years in time, the reality that the federal government didn't tell you about in Rick Mercer's series of taxpayer-funded commercials.

The Kyoto Protocol was sold to Canadians as a relatively pain free way of saving us from ourselves, but it was a transaction that didn't present us with a bill. Now we know better, at least until the cost increases again sometime in the future, but the true size of the price has yet to be felt by the average Canadian. Our newest tax, one that will impact on every aspect of our lives over the coming years, will likely make Canadians hotter under the collar than the Earth is allegedly becoming.

Thanks for reading,

Steven Martinovich

 






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