Thursday, May 22, 2014

Liberals should never have put HST on utilities

Remember how unpopular the HST was in British Columbia? The Liberal leader who legislated that — Gordon Campbell — was forced to step down. Well, even Campbell didn’t have the gall to put the HST on electricity and home heating.


Unfortunately for Ontarians, we had a pay-as-you-go conservative premier who loved gouging the little guy with regressive taxes, eco fees and endless electricity hikes: Dalton McGuinty.

While more than doubling the electricity rate — from 5¢ kWhr to 12¢ — he also jacked up electricity and home heating bills by 8% when he brought in his “job creating” HST.

Necessities of life

The HST is supposed to be excluded from necessities of life like food and prescription medicine. But apparently the “progressive” Ontario Liberal party believes that heating your home and using electricity are luxuries.

Real progressive

Thankfully Andrea Horwath is the only non-conservative leader running in this election. She’s the only one who will stop McGuinty’s injustice of gouging middle and low-income Ontarians with the HST on expensive utilities.

If you are a progressive voter, if you are a centrist voter, there is only one leader who has your interest in mind: Andrea Horwath.

Both Kathleen Wynne and Tim Hudak represent Ontario’s elite. Their top priority is borrowing billions every year to award the rich in corporate tax cuts — even though Canada has the lowest corporate tax rate among all major economies.


  1. Interesting, I had almost the exact opposite take. Not that I disagree with the reducing the costs of lower income people, and using various levers to make for a less regressive wealth distribution. I just don't think that energy is the place to do it.

    That is, because I care about reducing energy consumption - not just wealth distribution - I broadly support carbon taxes or fee and dividend or various other schemes that increase the cost of energy to create incentives to reduce consumption. Some energy is a necessity, to be sure, but a lot isn't. We take longer showers, crank up the AC, don't turn off the lights, crank up the heat more than is necessary, and so on.

    We've debated this a bit already, but I was going to push a right wing tax cutting agenda as an ostensibly left wing party, energy is about the last place I would do it. I wrote out a few more details on my blog:

    1. Under the Liberals hydro rates shot up from 5¢ kWhr to 12¢ + HST (the gift that keeps on giving.) That's an increase of 160%. And the Liberals are far from finished. They plan on hiking rates 33% over the next 3 years.

      The problem with the "green" Liberals is that they see the universe from the perspective of a politician or lawyer who makes over $100k a year. So they can jack up user fees, eco-fees, regressive taxes and electricity rates indefinitely without feeling the pinch.

      But if you are low-income with asthma, in the middle of a sweltering summer, you have to make a choice between breathing (firing up the A/C as you call it) or eating.

      I take it the Liberal green plan is to make electricity too expensive for the little people. That will certainly reduce consumption. But not in any progressive way. Not in any liberal way. Not in any humane way.

      And on top of gouging the average Ontarian with skyrocketing costs, they are also slashing benefits to the poor and disabled. This is while borrowing $2.4-billion a year in corporate tax cuts (to beef up their portfolios.)

      If Liberals want to consider removing some of the heavy burden they have placed on people struggling in an anemic economy "right wing" so be it. But I doubt they will be fooling anyone but themselves. They consider being out of touch with the people a virtue: it most certainly is not.

  2. I think that at its core, the opposition is conflating two different issues. On the one hand, we have the desire to reduce costs to low income people - such as the poor, starving asthmatic that seems to be the poster child for this HST off of Hydro push. I support more progressive wealth distributions and would love to help the poster child out - I am only contesting whether this particular method is the best way to do so.

    On the other hand, we have questions of global warming and energy sustainability. If we reject full stop any plan such as carbon taxes, cap and trade, fee and dividend schemes, and so on, that have an effect of increasing the cost of carbon based energy, we are never going to accomplish much.

    If you want to criticize increased energy costs from HST and the feed-in-tarrif program (I have no problem with criticizing other inefficiencies) on the basis that they were not appropriately paired with progressive wealth distribution schemes then I am probably right with you. But if you want to criticize the HST on Hydro in a vacuum as if it is intrinsically bad, I certainly disagree. Higher energy costs are EXACTLY what is required to create incentives to reduce net energy consumption, reduce global warming, and help move towards energy sustainability. I think the money raised should be funneled back into the kind of ends that NDP supporters would likely support, but too simply say that this is a cost in column A without considering columns B-Z is too simplistic and ends up with opposing precisely the kind of policies we should support.

    1. The problem with the neo-Liberal approach is that, unlike Germany, they are not putting forward progressive wealth distribution schemes to enable people of all income levels to go green. In fact, they are slashing benefits to the poor and disabled.

      Their approach to make electricity too expensive to use will just cause a backlash from the public, which will set back green progress by decades. (We live in a democracy and need democratic support for any policy.)

      You appear to be conflating the issue of carbon-intense energy use with any kind of energy use. The electricity grid is supposed to be upgraded over time so it is eventually 100% renewable energy. The entire principle behind electric and hydrogen cars is to reduce GHG emissions by using the electricity grid, which will be the least GHG intensive. Punishing people for using electricity is the wrong way to go. Carbon pricing is meant to make cheap dirty energy expensive and force people corporations to go green (force people to get cars that use less gas, etc.)

      The Liberals are huge hypocrites on the environment. Justin Trudeau's main plank is getting Alberta's bitumen to China and the US Gulf Coast. So bleeding low-income earners like stuck pigs with absurd hydro costs will not offset all the damage they will do peddling Alberta's dirty tar to the world.

  3. Right, I think that was exactly my point. If the problem is the lack of German-esque progressive wealth distribution schemes, then complain about that and I will probably agree! But I got the impression from your post that you thought the idea of taxing energy was bad in and of itself, without any mention of an option like "increase energy costs, offset with wealth distribution" which is my preference. In particular, the NDP plan is one that is aiming to reduce energy costs with no pairing. It would help reduce costs, certainly, as would any number of different options help reduce costs to ontarionians. But it reduces them in one of the few places where we should actually want to have incentives against high energy use!

    It is certainly true that much of our energy comes from nuclear and hydro (although both have their own problems). However, reducing our total energy usage long term reduces the pressures that exist to use fossil fuels. Energy is fungible. If at some future time we manage to move to a post carbon energy economy, then we can reduce the incentives like feed-in-tarrifs and energy taxes and whatever schemes one prefers (there are many out there with different benefits and consequences).

    Finally, given how on my view the extra costs of energy taxes get funneled back in progressive ways, the net cost to individuals doesn't go up and thus shouldn't set the movement decades due to lack of popular support.

    1. My argument is against putting a consumption tax on necessities, which electricity is one. I certainly believe in taxes, subsidies and regulations that directly reduce GHG emissions. I also believe there has to be a limit on electricity prices and after a 160% increase, we have passed that limit.

      Political considerations must also be taken into consideration considering we live in a democracy. The pendulum will have to swing back to the left before we can implement schemes that redistribute money to the poor.

      A small reduction in electricity rates is politically viable and will help low-income earners the most because electricity eats up more of their income than other groups. (Low-income people in housing that includes electricity have not been hit with the 160% increase.)

      After 30 years of Tough Tory Times and 'starve the beast' schemes implemented by neo-con parties and cemented in place by the Liberal party, the cupboard is bare for redistribution schemes, which was the plutocrats' goal.

      So to reverse this destruction we need to return to post-war centrist Keynesian economics based on progressive taxation. That means cancelling 30 years of tax cuts for the rich.

      We also need big government infrastructure projects to reduce GHG emissions and create jobs. Any FIT program should come from government subsidies, not endlessly increasing electricity rates. Mass transit and government involvement in broadband internet will reduce GHG emissions from the transportation sector which makes up 24% of all emissions.

      Oil & Gas sector makes up 25%. Industry 11%. Electricity 12%. As I said, we need big reductions in other sectors and to make the electricity grid eventually 100% renewable energy. So punishing people for using electricity is barking up the wrong tree.


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