Liberals Conjure Administrative Magic – Again

The Liberals have happily launched a new political initiative that demonstrates their continuing belief that there is no discernable difference between a press release and a policy. This “Green Shift” carbon tax initiative can be criticized because the science beneath “global warming” is getting increasingly dubious. (1) It can be criticized for the disconnect between their “save the world” rhetoric and reality. (That Canada’s small impact will achieve global significance when China’s greenhouse gases are formally excluded from compliance. (2)

Indeed, one might even imagine that a “serious” political party planning the imposition of a surcharge on energy use in Canada would want to think it through, just a little. Energy use and the cost of energy use in a big, cold country, impacts households, the economy, international competitiveness and everything in between. Yet the Liberal plan changes almost daily, as each new criticism is met with a new and previously unknown “adjustment.” Such goings on indicate an opinion poll driven agenda with little or no economic analysis behind it. The blatant fact that the specifics of the “energy efficient,” “carbon reducing” technologies that produce the “environmental payoff” are largely relegated to “let George do it” platitudes is a confirmation that this is a Liberal spin campaign masquerading as a policy.

This re-organization of our tax codes, and our economy, will require a massive and massively complicated exercise in applied bureaucracy. The carbon tax will bring in a new taxation scheme, which will, among other things, require the government to (3):

• administer a complicated rewriting and re-administration of the tax code;

• administer the Green Rural Credit;

• administer an expanded Northern Residents Reduction;

• administer “accelerated” Capital Cost Allowances for business;

• administer new, partially refundable “Science, Research & Experimental Development Tax credits;

• administer an increased use of the Renewable Power Production Incentive;

• administer the Advanced Manufacturing and Prosperity Fund; and

• administer complementary regulations and incentives to Canadians for home retrofits, energy-efficient appliances and vehicles, low-carbon farm and forestry practices.

Happily, this tax will be “revenue neutral” where “by law, every penny that is raised in pollution taxes will be returned to Canadians through tax cuts.” (3) Unhappily, we have seen this sort of “so much good at so little cost” policy before. The plan is a textbook example of the sort of policy one gets from a political party that is either breathtaking ignorant of the cost of governance or blatantly willing to lie for votes. The scale of the Liberal disconnect can be seen by comparing the Green Shift to programs of comparable scope and size.

The Liberal's gun law bill c 68 was an administrative wonder that mandated no fewer than three licensing systems, (one for owners, one for guns, and one for permission to transport). This controversial law, which tried to restrict violent crime by regulating the law-abiding, was forecast at a mere $2 million a year in administrative costs. Its actual cost has risen to $2 Billion and that figure does not include costs to the Provinces, industry or gun owners. (4)

The GST another program of comparable complexity and size cost Revenue Canada $678 million in start-up costs. If expenditures by the other departments are included, the start up costs increased to $820 million. The tax costs $518 million a year to administer (1992-93). (5) It should be noted, that these costs do not include administrative costs to the Provinces, business or the public.

Perhaps the first question a would-be government should answer is how this “revenue neutral” policy with “every dollar” “returned to Canadians in tax cuts” will be administered and supported. After all, requiring a modest and passing knowledge of governance and its costs doesn’t seem like an unfair requirement.

Doubtless, the Liberal Party, Canada’s “natural ruling party” is fully prepared to answer this modest and unassuming question.

Reference

(1) Global cooling effect, Terence Corcoran, National Post 

http://www.financialpost.com/story.html?id=9e919563-e44b-4ca2-9706-8af9cf743c95

Four scientists: Global Warming Out, Global Cooling In

http://wattsupwiththat.com/2008/07/12/four-scientists-global-warming-out-global-cooling-in/

Climate facts to warm to

http://www.theaustralian.news.com.au/story/0,25197,23411799-7583,00.html

(2) The Kyoto Protocol

http://climatechange.sea.ca/kyoto_protocol.html

China's Growing Emissions The growth in China's emissions from 2006-2010 is equivalent to adding the 2004 emissions of Japan, Germany, United Kingdom, Canada, and Australia to China's 2006 total.

http://sciencepolicy.colorado.edu/prometheus/archives/climate_change/001295chinas_growing_emis.html

(3) Green Shift Book, Liberal Party

(4) First, they promised Parliament that they would implement the gun registry for $85 million over five years and that the net cost would be only $2.2 million. And remember when Justice Minister Anne McLellan wrote to the Toronto Star on July 19, 2001, saying that "user fees will cover the entire cost of the program”? http://www.garrybreitkreuz.com/breitkreuzgpress/guns132.htm

Gun registry cost soars to $2 billion, CBC

http://www.cbc.ca/news/story/2004/02/13/gunregistry_rdi040213.html

(5) The Goods and Services Tax: The Government’s Administration Costs, Govt of Canada

http://dsp-psd.tpsgc.gc.ca/Collection-R/LoPBdP/BP/bp377-e.htm

by Bruce Gold (goldb@telus.net)