penny wise pound foolish

Stephen Harper threw his two cents into the election fray yesterday. And, if implemented, his plan to cut the excise tax on diesel and aviation fuel…

Stephen Harper threw his two cents into the election fray yesterday.

And, if implemented, his plan to cut the excise tax on diesel and aviation fuel by pennies will cost Canadians more than a few bucks.

It’s counterintuitive, sure, but it’s important people realize how such cuts play out.

Remember, the excise tax is money that Ottawa collects on fuel sales.

It represents a redistribution of wealth.

The money flows into general revenue, and is used to pay for federal services — meat and airline inspections, the military, the arts, research grants, roads, bridges, transfer payments to the territories — from which all Canadians benefit.

When you cut taxes, the federal government is poorer and less able to respond to national crises.

When you cut fuel taxes, the problems are even more complicated, which is why most premiers and prime ministers — including Harper — have resisted doing this.

First, the money rarely gets to the public.

Prices may drop momentarily, but oil, transportation and food companies often snap up the vacated tax room. In the end, the public is no better off and the federal government is financially weaker.

Second, once the tax is dropped, it becomes politically difficult to raise it again, especially in an era of constantly escalating oil prices.

So it’s better to leave the money in Ottawa’s hands than in Exxon’s.

Third, cheaper fuel encourages consumption and makes industry and the public more likely to be wasteful.

And these days, with the ice caps and glaciers melting and scientists around the globe warning about the changing climate, the last thing we need is to encourage people to continue wasting energy.

Better to keep prices higher, forcing the creation of new energy-efficient technology, conservation and innovation.

This week, a group of 70 prominent Canadians, including four former prime ministers (Kim Campbell, Joe Clark, Paul Martin and John Turner), former premiers, CEOs, academics, artists and aboriginal leaders suggested just that.

Ottawa must do more to combat climate change and make the nation more energy efficient, said the non partisan group.

While Harper has moved the nation away from voluntary initiatives and Liberal Leader Stephane Dion has been honest with Canadians about the need to pay for the pollution they cause, there is much more to do.

“There is still a huge gap between what the scientists tell us and what our politicians are willing to do,” the group says in a statement. “Our leaders know the true severity of the problem and what it would take to put us on the right path — we need them to level with Canadians about the urgent need to eliminate emissions and what it will take to do so.”

The formation of the group suggests a concensus is forming about the need to act to curb pollution.

The group favours a carbon tax or a cap-and-trade system — forcing Canadians to pay for the energy they choose to use.

Harper’s odd fuel tax cut directly contradicts this approach.

Delaying action on energy efficiency and climate change will cost Canadians billions.

In the face of that, Harper’s

Just Posted

Chief Medical Officer of Health Dr. Brendan Hanley announced 29 new COVID-19 cases on June 19 and community transmission among unvaccinated individuals. (Yukon News file)
Yukon logs record-high 29 new COVID-19 cases

F.H. Collins prom attendees and some Porter Creek Grade 9 students are instructed to self-isolate as community transmission sweeps through unvaccinated populations

Crystal Schick/ Yukon News A former residential school in the Kaska Dena community of Lower Post will be demolished on June 21. Crystal Schick/ Yukon News
Lower Post residential school demolition postponed

On June 21, the old residential school in Lower Post will be demolished and new ground on a multi-cultural centre will be broken

Willow Brewster, a paramedic helping in the COVID-19 drive-thru testing centre, holds a swab used for the COVID-19 test moments before using it on Nov. 24. The Yukon government is reopening the drive-thru option on June 18. (Crystal Schick/Yukon News)
Drive-up COVID-19 testing opening June 18 in Whitehorse

The drive-up testing will be open from 6:30 p.m. to 9:30 p.m. everyday and increase testing capacity by 33 spots

A draft plan has been released by the Dawson Regional Use Planning commission on June 15. Julien Gignac/Yukon News
Draft plan released by the Dawson Regional Land Use Planning Commission

Dawson Regional Land Use Commission releases draft plan, Government of Yukon withdraws additional lands from mineral staking in the planning region

Yukonomist Keith Halliday
Yukonomist: Let them live in trailers

“I found Rome a city of bricks and left it a city… Continue reading

Whitehorse City Hall (Yukon News file)
City news, briefly

A look at decisions made by Whitehorse city council at its June 14 meeting

Murray Arsenault sits in the drivers seat of his 1975 Bricklin SV1 in Whitehorse on June 16. (Stephanie Waddell/Yukon News)
Bringing the 1975 Bricklin north

Murray Arsenault remembers his dad’s Bricklin, while now driving his own

A presumptive COVID case was found at Seabridge Gold’s 3 Aces project. (file photo)
Presumptive COVID-19 case reported at mine in southeast Yukon

A rapid antigen rest found a presumptive COVID case on an incoming individual arriving at the 3Aces project

Jonathan Antoine/Cabin Radio
Flooding in Fort Simpson on May 8.
Fort Simpson asked for military help. Two people showed up.

FORT SIMPSON—Residents of a flooded Northwest Territories village expected a helping hand… Continue reading

A woman was rescued from the Pioneer Ridge Trail in Alaska on June 16. (Photo courtesy/AllTrails)
Alaska hiker chased off trail by bears flags down help

ANCHORAGE (AP)—An Alaska hiker who reported needing help following bear encounters on… Continue reading

Two participants cross the finish line at the City of Whitehorse Kids Triathlon on June 12 with Mayor Dan Curtis on hand to present medals. (Stephanie Waddell/Yukon News)
2021 Kids’ Triathlon draws 76 young athletes

Youth ages five to 14 swim, run and bike their way to finish line

NDP MP Mumilaaq Qaqqaq rises in the House of Commons, in Ottawa on May 13, 2021. THE CANADIAN PRESS/Adrian Wyld
‘Unacceptable’ that Inuk MP felt unsafe in House of Commons, Miller says

OTTAWA—It’s a “sad reflection” on Canada that an Inuk MP feels she’s… Continue reading

Lily Witten performs her Canadian Nationals beam routine on June 14. John Tonin/Yukon News
Three Yukon gymnasts break 20-year Nationals absence

Bianca Berko-Malvasio, Maude Molgat and Lily Witten competed at the Canadian Nationals – the first time in 20 years the Yukon’s been represented at the meet

Most Read