Canada: Liberal carbon tax plan attacked from all sides amidst rising gas prices

The Globe & Mail has an interesting article in its May 8th issue that recognizes the political and social problems any government will face if it attempts to implement a carbon tax regime.

The Canadian Liberal party leader, Stéphane Dion, has leaked information on his soon-to-be-released plan to cut Canadian greenhouse gas emissions. Dion plans to create an across the board carbon tax (on all fuels, not just gasoline). While the specifics of the plan have not been released, it is described as being revenue neutral, as it will include balancing tax cuts for middle-income and working Canadians. Dion apparently will attempt to sell the plan as a "tax shift" rather than a tax increase.

Unfortunately for Dion and the Liberal Party, not everyone is buying the idea that government is ever willing to simply "shift" taxes, rather than raise them. Additionally, Dion is releasing information about the plan at the same time Canadians are being hammered by rapid price increases at the pumps. Consequently, people from all sides of the political spectrum, including members of his own party, are now saying introducing the tax is a distraction and will actually give the other Canadian political parties additional ammunition for the upcoming Canadian election.

The policy of a broadly based fuel tax is making some Liberals nervous,
because gasoline prices are rising at warp speed and Canadians are
being punished at the pumps.

“Just in the short time Dion has mused about a carbon tax, the
Conservatives have already preframed the issue negatively in the
media,” said a veteran Liberal strategist who opposes releasing the
plan now.

“Imagine what they will do with the actual material in a sinking economy,” he says.

08. May 2008 by
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