Category Archives: economy

Please Stop Keeping Your Promises

conservative party, economy, foreign affairs, ndp

As a form of entertainment, I subscribe to the e-newsletters of the status quo parties. Seriously, it can actually be funny. Like this week, when the NDP Conservative parties swapped election slogans. (The NDP sent out an email promising to “Stand Up for Canada” while the Conservatives are now getting “real results,” presumably for “real people.”) Maybe it’s some kind of exchange program.

Anyway, the latest Conservative email highlights three of their kept promises. Reader willing, I’d like to deal with them seriatim.

1. GST Cut
I don’t want to spend a lot of time on this, because there’s no shortage of economists who recognize that cutting consumption tax (as opposed to income tax) is bad economic policy, including the IMF and the OECD (not to mention the powerful Tim Hortons Think Tank). Our individual savings will be insignificant, and the GST cut is worth more to those with high-income.

Where cutting sales tax increases consumption (which is another way of saying increases the rate at which we take stuff from the Earth and turn it into waste), cutting income tax encourages saving and investment. You can then apply those income tax cuts to resource consumption, which discourages waste and inefficiency. In short, that’s what the we mean by “green tax shift.” (Unfortunately, the government has also raised income tax, so they’re doing the exact opposite.)

At the Rosedale United Church debate during the last election I was asked to explain our green tax shift policy, and in response the Conservative candidate said that he felt it was generally a good idea and that it was something his government would support. Either he didn’t understand my party’s platform or his own — I’m not sure which.

2. Increased Military Funding
I actually do think our military has been neglected for too long. For example, we still have it in our head’s that we’re the world’s peacekeepers, when in reality we’re not even in the top ten. And if we want to ask Canadians to put their lives on the line, the least we can do is make sure they have the tools they need to do the job.

Unfortunately, the Conservative plan gets the priorities for military spending all wrong. The plan’s two most expensive items by far are $8.3 billion for airlift capability, and $4.7 billion for 16 helicopters. The first item refers to the purchase of some heavy-lift aircraft used in transporting our troops and equipment around the world. The reason it’s a bad idea is because we’ve been able to rent our transport needs for a fraction of the cost. It’s a bit like buying a car instead of renting, even though you only use it to go to the cottage a few times a year. It’s not an effective use of military resources.

The second item is even less wise, since helicopters are primarily used to fight submarines. And you don’t have to be a military expert to know that submarines are probably not the number one threat to Canada right now.

Instead, we should be focusing on building a strong army capable of intervening in places like Darfur. We also might want to look into measures to protect our water, and give some thought to what the world’s going to look like when the phenomenon of eco-refuge really starts to take off.

3. Transit Pass Tax Credit
This isn’t a bad idea (it was actually part of our platform as well), but in a vacuum of any other action is almost useless.

Here’s the problem. Public transit is already almost the cheapest way to get around (second only to biking or walking), while driving is almost the most expensive (second only to being carried around by four professional football players on a sedan chair made of gold). The monthly parking rate in my office building is around $470 (almost 5x the cost of a TTC metropass), and people drive single-occupancy SUVs and mini-vans to work everyday. Once you’ve paid for the car, insurance, and gas, you’re looking at over $1000/month to drive to work! Even people in less offensive cars with access to cheaper parking are paying way more than someone who takes transit every day. Does anyone other than the government really think that a tax credit is going to speak to these folks?

Even if it did, there’s another problem (one that would have been identified by our minister of transportation if he’d taken transit recently). The subways are full. The commuter trains are full. Giving people a tax credit to ride transit when there isn’t any room makes about as much sense as giving out daycare money when there aren’t any daycare spaces.

Oh wait.

Save Your Money

economy, energy

Here’s a funny headline. I mean, not Jay Leno funny, but funny. “Energy-saving programs lose funding.” The irony being that an equally accurate headline could have been “Energy-saving programs save money (and the planet).” At least, that’s what I would have written. But maybe that’s why I still haven’t heard back from any of those headline-writing jobs I applied for.

Remember, this is a simple physics problem (if there is such a thing). Even if we forget how much money can be saved by using less energy and being more efficient (read, competitive), this world still only has one energy input. In other words, we get a finite amount of energy to use each day. And currently, we’re burning (literally) through 10,000 days worth of energy every 24 hours (by using up non-renewable, stored energy from the past).

Look at it this way. Imagine you had a large bank balance (fossil fuels), an income of only $40,000 a year (the sun), and annual expenses of $400,000,000 (cars, food from around the world, over-air-conditioned offices, etc). A friend might worry about you and speak up. “Hey,” they’d say. “Looks like you might be spending beyond your means there buddy. Think maybe you should cut back?”

“No way,” you’d have to reply, “that’s not realistic. I mean, I’d have to change my lifestyle! Don’t be crazy. And shave your sideburns, hippy.”

Or something like that. The point is, at the end of the day, conservation has to be the cornerstone of any responsible energy policy. And yes, that does mean we might have to turn off some lights. Sorry. On the other hand, we get to keep breathing. So, you know, there’s that.

The Status Quo Budget

conservative party, economy, liberal party, ndp

You may have heard Greens refer to the other three national parties as the “old-line” parties. I’ve never been a big fan of this term since I consider it to be a little negative and mean-spirited (though I almost changed my mind when Peter Kent casually used it to refer to his own party in a conversation with me). Instead, I call them the status quo parties. The Liberals, Conservatives, and NDP represent business as usual, with their only differences being largely aesthetic. In the words of Christopher Waddell, they all “seem struck by a collective crisis of imagination.”

That’s why it wasn’t surprising to here Michael Hlinka (Metro Morning’s business commentator, and my neighbor) this morning (on the radio, not at my door) saying that this Conservative budget is almost identical to what we would have gotten from the Liberals. It even contains specific Liberal promises, as well as all the stuff the NDP negotiated to prop up the Liberals a year ago. (Makes you question all the time, energy, and money that went into the election, doesn’t it?)

The main difference, according to the Globe and Mail, is that the Conservatives are taking dangerous financial risks, hoping that the global economy will continue to outperform at an extremely unlikely rate. The Globe concludes by saying that the Conservatives have taken Canada “too close to the deficit brink…counting on their commodity chickens to keep producing. It is too easy for the perilous outside world to dash those forecasts, and spoil our collective party. And that is too great a risk to take for votes.”

And they’re only talking about a fiscal deficit, to say nothing of the social and environmental deficits which continue to build up. Either way, this budget takes is further down the same road. And that’s a bad thing, because this road ends at a cliff.

When “Greenest” Isn’t Green

conservative party, economy, trade

Last night, Brian Mulroney was declared Canada’s “greenest” prime minister by a group of environmentalists selected by Corporate Knights magazine. Someone with more restraint than myself would probably just say “way to go” and leave it at that, but, well, here we are.

Let’s give credit where credit is due. Mulroney oversaw the creation of a Canada-US acid-rain treaty, and signed on to the UN Framework Convention on Climate Change. He spoke frequently and passionately about the need to take action on issues of environmental health. If he’d had five priorities, the environment would have been one of them.

Signing treaties, regulations, and agreements was where Mulroney excelled. Unfortunately, we’re far more threatened by our economic systems and structures than by lack of regulations. And in this area, Mulroney took us backwards, not forwards.

No amount of regulation alone can possibly hope to stand up against an economic machine that is designed to extract virgin resources and turn them into waste more quickly and efficiently than has ever before been possible (what Ray Anderson calls the take-make-waste economy). According to Anderson, “less than 3% of the material processed through the [industrial] system has any value whatsoever six months after its extraction from the earth.” Trying to regulate against a system that is designed to create waste is a bit like dealing with the proverbial bull in the china shop by covering it with foam padding. The point is, the bull shouldn’t be there in the first place.

The greening of Canada will only happen when we create closed-cycle, local economies. Standing directly in the way of this goal is Mulroney’s most well-known legacy, NAFTA. Not only does chapter 11 of NAFTA prohibit the Canadian government (for example) from interfering with an American corporation’s “right” to make money by asking them to, say, please stop putting carcinogens in our water, NAFTA also encourages the development of global economies in opposition to strong, local, green economies and communities. It will need to be significantly re-negotiated or replaced before much progress can be made towards building a green economy.

For me, NAFTA detracts from the other positive contributions Mulroney made to genuine progress. If he truly is our greenest prime minister, we could stand to get a lot greener.