Green Tax Shift will protect Canadians against gas price shocks, says Green Party

Here are two recent press releases on the green tax shift that the Green Party is proposing, along with some background documents below.

A green tax shift is also known as ecological fiscal reform (EFR) and you'll find more info on EFR at this link.

Green Tax Shift will protect Canadians against gas price shocks, says Green Party
12.06.2007
OTTAWA – The Green Party of Canada warned today that Canada will enter a period of sustained and escalating price shocks at the gas pump unless the federal government moves quickly to protect Canadians from the financial toll of declining oil supplies in an era of growing global demand for oil.

“The current spike in Canada’s transportation fuel costs is just the start,” Green Party leader Elizabeth May said today. “It is going to get much worse if, like Prime Minister Harper, we simply accept that there is nothing we can do because the price increase is due to the imbalance between global oil supply and demand.”

The Green Party’s recently-released climate change plan – A New Energy Revolution to Avert Global Catastrophe – sets out a detailed strategy to simultaneously stabilize transportation costs and protect personal disposable income while reducing greenhouse gas emissions and air pollution.

This comprehensive and integrated green economic plan maximizes the energy efficiency of vehicles, significantly expands public transit alternatives, introduces environmentally sustainable smart urban planning and agricultural practices, promotes development of renewable energy and encourages aggressive energy conservation measures.

The plan’s key policy lever is the Green Tax Shift, which cuts income and payroll taxes and introduces a variable carbon tax on different types of fuel. The tax shift is revenue-neutral: there would be no net gain to the government’s tax coffers because individual income and payroll taxes would be cut by the same amount as the revenue collected by the carbon tax.

Canadians employers and workers would pay more for energy but this would be offset by lower payroll and income taxes. Canadians on lower incomes, who pay no income tax, would be given a carbon tax rebate similar to the GST rebate.

According to the Green Party’s Industry and Entrepreneurship Advocate, Eric Walton, by gradually increasing the cost of energy in clearly prescribed stages, the carbon tax will drive rapid technological innovation, vehicle fleet conversion, appropriate government regulations and personal transportation adjustments that will in turn reduce energy consumption.

“Over time, this will reduce demand and protect Canadians from rapid, uncontrolled gas price increases by reducing the percentage of an individual’s or family’s budget spent on transportation costs,” said Mr. Walton. “It is a win/win strategy that protects both the environment and the disposable income of Canadians through the Green Tax Shift.

“Maintaining the status quo will continue to damage the atmosphere and provide no financial rebate on income and payroll taxes. That is the lose/lose proposition."

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Averting Climate Catastrophe: Green Party lays out roadmap to Canada’s low-carbon future

06.06.2007
OTTAWA – Green Party leader Elizabeth May today unveiled the party’s Environment Day gift to Canada – a comprehensive blueprint for a thriving low-carbon economy and a clean, green energy future that will reinstate Canada as a leader in the global campaign to prevent catastrophic climate change.

Ms. May released the Green Party Climate Plan: A New Energy Revolution to Avert Global Catastrophe, in Ottawa today – World Environment Day – with an urgent message for Prime Minister Stephen Harper, Environment Minister John Baird and opposition party leaders:

“Please steal these ideas. They are decisive but workable and they will drive rapid progress towards achieving our Kyoto targets for reducing greenhouse gas emissions and keeping global temperature rise below 2 degrees Celsius. There is no time to lose.”

As the Prime Minister joins leaders of the G-8 industrialized nations in Heiligendamm, Germany – with climate change top of the agenda – Ms. May also urged Mr. Harper to reject the defeatist attitude being promoted by the Bush administration and to reaffirm Canada’s commitment to Kyoto and further medium- and long-term emissions reduction targets.

“This is no time to align ourselves with the laggards of the world,” said Ms. May. “It is a time for vision and ambition. The transition from fossil fuels to renewable energy represents the greatest business opportunity the world has ever seen. The federal government’s dogged refusal to recognize and seize that opportunity is a failure of leadership that puts Canada’s future prosperity in great jeopardy.”

The cornerstone of the Green Party plan is an immediate $50/tonne carbon tax, rising to $100/tonne by 2020 if necessary. Experts agree that a carbon tax is the most efficient and effective way to cut greenhouse gas emissions, but some say it is politically dangerous to enact a carbon tax. (See what experts say in the attached backgrounder.)

A $50 carbon tax adds 12 cents to the cost of a litre of gas at the pump. That revenue will be used to progressively reduce other taxes, including income and payroll taxes, and to provide tax incentives for reducing carbon dioxide (CO2) emissions.

The plan also includes a cap-and-trade CO2 market for Large Final Emitters – the big mining, manufacturing, oil, gas and thermal electricity companies responsible for about half of Canada’s total emissions. Trading of CO2 allocations will be overseen by a non-governmental body.

The Green Party plan also calls for:

• Rapid development of Canada’s renewable energy sources through tax incentives, research funds and new policies, including carbon conditionality clauses requiring provincial adoption of Advanced Renewables Tariffs.
• Tax incentives, regulation and funded programs to cut vehicle emissions 30% by 2015 and 85% by 2040, including incentives for the Canadian manufacture of electric and plug-in hybrid electric vehicles.
• A retrofit of all Canada’s buildings to a high level of energy efficiency by 2025 and zero net energy after 2025 using refundable tax credits, tax-deductible Green Mortgages, 100% Accelerated Capital Cost Allowance, revolving federal loans and changes to Canada’s Building Code.
• Regulations requiring all appliances to meet Energy Star rating by 2015 with most inefficient appliances and light bulbs phased out by 2010.
• Adaptation strategies to cope with climatic disruption that is no longer avoidable, including a special task force to prepare area-specific strategies and a Climate Change Adaptation Fund to assist areas hard hit by “natural” disasters linked to global warming.
• Withdrawal of federal funding for programmes such the Pacific Gateway Programme, that encourage urban sprawl and increase vehicle use.
• Removal of all subsidies to coal, oil, gas and coalbed methane production, a cap on overall extraction levels of fossil fuels, and phasing out of coal, oil, gas and nuclear electrical generation.
• Payments to farmers for carbon sequestration in soils within a domestic carbon market.
• A carbon tax or carbon rebate for forest companies to reflect either the net loss of carbon storage or the net gain of carbon sinks from their lands.
• A methane tax on all landfills and mandatory methane capture after 2015.
• Global verification and certification standards for carbon credits and the establishment of a Canadian Carbon Bank along with a federal framework for local and provincial carbon banks to encourage the purchase of local offsets.
• Expansion of the Kyoto Protocol beyond 2012 to include international aviation and shipping and commitments to ramp up solar energy, electric vehicles and other low carbon technologies.

Green Party Climate Plan (PDF)

Summary Plan & Carbon Tax Quotes (PDF)

Key Points on Climate Plan

Carbon Tax FAQ