Friday, July 25, 2008

Leading advocate says Dr. Dion's carbon tax will leave people in poverty

It’s not just members of the Liberal caucus who are today expressing their doubts about Doctor Dion’s “Let the rich pollute” carbon tax scheme.

One of the country’s leading anti-poverty advocates is questioning the Liberal Party’s claims that their “Green Shift” is “the most aggressive anti-poverty program in 40 years” (that being the boast MP Ken Boshcoff made right before his more famous one).

As a prop in this most recent production of “Liberals Stand for the Same Things as the NDP,” the carbon tax is brilliant political theatre. Dr. Dion’s pitch to NDP voters goes like this: “Okay, you are right. A carbon tax won’t get us to our greenhouse gas reduction targets. But come on, you HAVE to play along with us because we’ve got all this great anti-poverty stuff in here too. Honest!”

But in an analysis of the plan, Rob Rainer, head of the National Anti Poverty Organization (NAPO) concludes that the carbon tax falls far short of Liberal boasts.

In his analysis of the tax measures, Rainer shows that individuals and families already struggling to make ends meet will still be deep in poverty were the carbon tax to go ahead.

A couple with two children scraping by with $20,000 would see only $1,150 in income tax cuts under Dion’s plan – still leaving them $12,800 below the poverty line. And a single person toiling for minimum wage at $15,000 would get the equivalent of a mere 3% back from Dion – still leaving them $2,500 below the poverty line.

Ranier’s analysis, emailed to anti-poverty activists this week, doesn’t even consider how increased prices due to the carbon tax will further worsen the state of those in poverty. It also doesn’t make mention of the fact that most people in poverty don’t benefit from the income tax system, as they don’t pay any taxes – except sales taxes, like the carbon tax.

But Rainer’s criticisms of the carbon tax aren’t just about those who don’t benefit. He rightly reprimands Liberals for having submissively hopped into bed with Harper’s agenda of gutting the public purse through tax cuts for corporations:

"By year four of the plan (~2013), the cut for the second highest marginal tax rate bracket and the corporate tax cut would remove $2.4 billion annually from the federal treasury – about what the AFB 2008 estimated to be needed in housing and homelessness supports ($2.3 billion) on top of current spending."

Despite all their earnest claims to the contrary, Rainer conclusion is that the carbon tax scheme is bad policy that won’t help people in poverty:

“the absence of a comprehensive approach to poverty reduction and eventual elimination; the unfortunate inclusion of tax cuts for corporations and relatively high income earners at the expense of further support for low-income Canadians; and most of all the absence of recognition of income security as a human right and right of citizenship, detracts not only from enthusiasm for Green Shift but ultimately its power of anti-poverty impact.”

So let’s review, shall we? The Green Shift can’t promise to meet targets and while it will increase costs for everyone, experts say it won’t help people out of poverty.

So, why is Dion offside when he could be working with Jack Layton and the premiers on a cap and trade system that will work?


Greg said...

I would like you to be more clear about what you're saying. Is it

a) the green shift will help, but won't lift everyone completely out of poverty or
b) the green shift will make things worse for poor people

Every little step helps.

Cicely said...

Greg: he is saying -
1. the green shift will likely do little if anything for the evironment
2. it is not an anti-poverty plan since it does not lift people out of poverty and in fact will make it MORE difficult to fund social programs since the govt will be giving away cash to people who fall into higher income tax brackets and to corporations

That is why the NDP has a cap and trade policy that has a hard cap on emissions - works for environment and the sale of emissions will generate revenue the government can use for implementation of enviro programs.

The NDP has a separate plank to address poverty.

Jason Cherniak said...

I think Greg's (a) is the likely explanation. That being the case, what is the NDP proposing that is better?

Malcolm+ said...

The point, dear panicked Liberatives, is this.

Your feckless leader proclaims that his environmental plan will do wonders for the environment and wonders for the poor.

The facts, however, show that his pitiable plan with the stolen name will do two-thirds of four-fifths of bugger all for the environment, while doing perhaps three-quarters of five-sixths for the poor.

Only in the deluded mind of a Liberative hack would this be called a serious contribution to the public policy discussion.

The Grumpy Voter said...

Dion's carbon tax is NOT about the environment and completely about generating revenue to bankroll Liberal social spending. While I am in favor of social spending, I find it highly insulting as a voter that Dion is wrapping this tax grab up in the trappings of "being green" when in fact the policy ain't about the environment at all. Canada produces less than 2% of global GHG's, our contribution is akin to a small guy farting in a room of six billion flatulent people - it won't make a hill of beans of difference to global GHG emissions and anyone who thinks it will should really seek professional help with that.

Blogging Horse said...

Jason - the NDP is proposing a European-style cap and trade system ... the same system Dion said was superior to a carbon tax back when the environment mattered to Liberals and before he decided to start playing politics with Stephen Harper.

Jaytoo said...

"...when the environment mattered to Liberals and before he decided to start playing politics with Stephen Harper...."

Bingo. Dion broke consensus on carbon pricing -- choosing a weaker plan -- to promote conflict and change the channel on "Not a Leader." Partisan goals, not environmental ones. And it's reassuring to see pundits, starting with Paul Wells, finally starting to name this too.

Also, on gutting the treasury, you really have to see the "Green Shift" as continuous with Harper's corporate tax cut plan -- which Dion not only rubber-stamped but promised to beat. Those giveaways alone will cost the treasury $14.8-billion per year by 2013 (before the additional cuts in the "GS").

That's enormous capacity that could have been invested in priorities like affordable housing (as Rainer notes). But also in green programs -- renewable energies, self-financing home energy retrofits, public transit expansion, and so on. And Dion would legitimate this neocon, program-starving ruse by stamping "Green Shift" all over it.

Doesn't that define "greenwash"?

Rob said...

The writer of the original post took liberty with what I had written about the Green Shift plan. I did not write that the plan was "bad policy that won’t help people in poverty." I only pointed out some deficiencies of the plan with respect to addressing poverty. There are some plusses in the plan but these, in my view, are outweighed by the negatives. In general, the Liberals should have been bolder for example by proposing to increase the tax rate on the highest income earners, offsetting that revenue by a further reduction to the lowest income tax bracket, and also by directing some of the carbon tax revenue to helping low-income households directly with investments in energy efficiency - a rising need in the wake of escalating energy costs and another way to help knock down Canada's greenhouse gas emissions.

I give the Liberals high marks for being willing with the Green Shift plan to innovate with public policy. It's just that they haven't gotten the right mix of things yet, for example, the misguided inclusion of tax cuts for higher (but fortunately not the top-most) income earners and for corporations - cuts that will further erode the government's fiscal capacity to invest in areas of critical social and environmental need.

Readers who would like a copy of my article are welcome to contact me at