Fastest way to transition Canada to a green economy? Quit the giveaways.
By Mitchell Anderson, 1 Feb 2016, TheTyee.ca
How can Canada meet our international climate commitments so recently inked in Paris with an increasingly empty economic larder? The International Monetary Fund may have the answer. Last summer, the IMF updated its global report on energy subsidies and found that Canada provides a whopping $46.4 billion in subsidies to the energy sector in either direct support or uncollected taxes on externalized costs.
How much money is being left on the table in favour of the fossil fuel sector? According to IMF economists, Canadian carbon-based fuels should be taxed an additional $17.2 billion annually to compensate for climate change, $6 billion for air pollution, $14.9 billion for traffic congestion and $2.1 for traffic accidents. Tacking on another $3.5 billion for uncollected value-added taxes, $880 million for road damage and of course the $1.4 billion in direct subsidies, we arrive at almost $50 billion annually that could help transition to a greener economy.
And what could Canada do with another $46 billion each year? In terms of badly needed public transit, we could immediately pay for both the new Broadway SkyTrain line in Vancouver and the Bloor Street subway extension in Toronto, and still have $40 billion left over. There are also 120 kilometres of proposed light rail projects in the country we could finally build and only be down to $35 billion. Remember, these badly needed infrastructure investments are one-time expenses and the subsidies identified by the IMF rack up every year.
Other urgent needs include building and maintaining affordable housing, estimated to be about $3 billion annually. The public portion of a national pharmacare program might amount to an extra $1 billion each year (though it could also save us money too). That still leaves billions of annual public revenue that could provide tax relief to those shifting away from fossil fuels as well as transition training for displaced workers in our beleaguered oil sector.
The folks at the Fraser Institute might get rankled by such a broad definition of subsidies by those pinkos at the IMF, and in fact they already have. But as they say in business, there’s no free lunch, so why should all taxpayers have to pick up the tab for very real costs resulting from our ongoing addiction to fossil fuels?