Carbon Tax in Canada: What did we do??

 

To start this blog, I would like to highlight that I am not an economist, not tied to any form of government, I am most simply and humbly a business person. 

When we 1st heard of the carbon tax, it was my understanding, it was supposed to punish abusers and not all who use carbon-based fuel.  I wonder if that is the case: 

• * Electricity charges in pre-carbon tax were about $.05 per KWH. Now we are at about $.085 and rising 

• * Gas was at about $.9 per liter, now over $1.20 and on the rise.  (yes, I do realize wages have gone up.  But now over $.35 per liter is taxed and rising in Canada) 

On a 1st brush, one may say one should simply drive less and adopt better technology for lighting and electrical use and done is done.   When I 1st heard of it I thought of the movie Dragonheart – Road Tax.  For those who don’t remember or know; you’ll have to watch the movie or read the book. 

But let us “peel this onion a bit”.  Do we go to a store to buy groceries?  For those who do, they should notice their bill has just increased by a double-digit percentage.  And one may ask – why?  One could answer, how did the things you buy get there?  Is the place lit, if so, how?  The obvious answer is carbon fuel.   

So yes, our costs of living have gone up dramatically over the past year and a bit.  Because of Covid, our income may appear to be less.  Government spending is on the rise and minimum wages have also increased.  So, are we heading full speed to the brick-wall we know as inflation and a recession?  The simple answer my friends is maybe not.  You see: the Canadian Dollar on the world market looks strong.  That is a sign that, in truth, our inflation rate is not on the rise.   One may ask, “How is this so”.   One may argue that the increases in Government programs and returns to businesses and individuals are in a great part funded by the Carbon Tax and other tax programs such as minimum wage increase.  Also, with income tax on the increase as a base, again the Government in fluxed their income.  As long as we keep our government funding increases within Canada we should not see “inflation or recession”.  The issue may become, though, that we borrow more than we earn.  If that happens, we will hit the wall.  We must ensure our programs stay funded internally as opposed to outside Canada.  A very good business person once said, “Money in vs. Money out” (thanks Brian). 

Would I say our Government Bodies are better than most: Did they see Covid coming?  Did they have a perception of costs and programs needed to keep us afloat?  Some may smell a conspiracy theory coming to bloom.  A quick and more realistic answer might be that sometimes it is better to be lucky than wise and/or good.   

Life is calling me away.  I have to run.  Please stay safe.  Until our next blog.....