Posted on 06/16/2006 5:45:09 AM PDT by doc30
Quebec unveils carbon tax Province hopes levy on oil and gas firms will put $1.2-billion toward its Kyoto goals RHÉAL SÉGUIN
From Friday's Globe and Mail
QUEBEC — Quebec plans to adopt tough vehicle emissions standards and will become the first province to levy a "carbon tax" on oil and gas companies as part of an ambitious plan to fight global warming.
The tax will raise about $200-million a year over six years, provincial government officials said yesterday, and will finance a $1.2-billion Green Fund to make reductions in greenhouse gas emissions called for under the international Kyoto accord.
Environmental groups welcomed the measures, but a petroleum industry spokesman said the tax will be passed on to consumers.
Quebec Premier Jean Charest and Environment Minister Claude Béchard said that from 2006 to 2012, the province will tax oil and gas companies for hydrocarbon products sold in bulk to retailers -- non-renewable fossil fuels such as heavy oil, gas, natural gas and propane.
The Quebec Energy Board has been asked to work out tax rates and other details, such as a sliding scale in which heavy oil used to heat homes might be taxed at a higher rate than less polluting natural gas.
The Green Fund would be used to finance projects such as improvements to public transportation, education about emission cuts and ways to make buildings more energy efficient. Quebec already has the lowest levels of greenhouse gas emissions in the country.
A carbon tax could prove politically divisive, however. Liberal MP and leadership contender Michael Ignatieff was criticized by members of his own party after he merely floated the idea.
Quebec's plan also calls for new vehicles sold after 2010 to produce less greenhouse gases. Tough standards similar to those enforced in California will apply to cars and trucks sold in Quebec. California has adopted stiff energy-efficiency standards, which between 2009 and 2016 will reduce greenhouse gas emissions produced by new cars and light trucks by 25 per cent to 30 per cent.
Manufacturers of vehicles sold in Quebec will have to install equipment to ensure that they meet the tougher emission controls, which could mean higher prices for the province's consumers.
"We want to be the leaders in Canada. 2010 is the objective we have set to impose the California standard," Mr. Béchard said. "Kyoto is not a dream; it is possible to achieve."
Along with Manitoba, Newfoundland and Labrador, Quebec has vowed to implement the Kyoto accord even if the federal government drops out. Prime Minister Stephen Harper has said the Kyoto goal of a 6-per-cent reduction in greenhouse gas emissions by 2012 may not be possible.
Mr. Charest said that in addition to the new tax, Quebec needs $328-million from Ottawa to meet the Kyoto targets. He noted that Ottawa has promised to give Ontario money for its efforts to fight global warming.
Oil and gas companies were quick to point out that the carbon tax will be passed on to consumers. Neither government officials nor company officials would speculate how much that will mean at the gas pump.
"There is no doubt that consumers will pay more for the measures," said Carol Montreuil, a spokesman for the Canadian Institute of Petroleum Products. "We are talking about $200-million, and in one way or another, this money will have to come out of the pockets of consumers. . . . You can't expect an industry to absorb an additional $200-million cost."
Mr. Béchard called the oil industry's reaction "odious." Mr. Charest noted that that the aluminum industry has reduced greenhouse gases and that other energy companies such as Hydro-Québec have introduced energy-efficiency measures without passing the costs on.
"It is high time [oil companies] play by the same rules as everyone else," Mr. Charest said. "This represents a great opportunity for the oil producers. If they don't see it that way I'd regret that. They'd be totally wrong. They will be on the wrong side of this issue."
Environmentalists applauded the Quebec government plan and urged other provinces to follow suit.
"This is an excellent move," Greenpeace spokesman Steven Guilbeault said. "The time has come for oil companies to pay for the pollution they cause related to climate change. It would be outrageous for oil companies who make billions of dollars in profit to have consumers pay the bill."
Environmentalists have long supported a carbon tax, saying it would discourage the use of fossil fuels while raising money for environmental uses. But it is strongly opposed in the Alberta oil patch.
The Canadian Association of Petroleum Producers said this week it continues to oppose any tax that singles out the oil and gas industry. Pierre Alvarez, president of the association, also noted that several senior ministers in the previous Liberal government had explicitly ruled out imposing a carbon tax.
With reports from Bill Curry, Patrick Brethour and CP
LOL, excellent point.
Might want to multiply their 'planned timeline' by at least 5 to get an idea of how long it will last.
LOL!
There was a long yak on one of the Montreal talk radio stations this morning and the liberal moderator actually asked the 'brilliant' (/sarcasm off) question, Do you think the company's will pay the tax or pass it on to consumers?.
Such a level of intelligence and basic understanding of economics.
Read my lips - Company's don't pay taxes! They are always passed on to the consumer in some form or other.
"Stupid, stupid, stupid thing to do."
Not so fast, doc. Let's think about it a little.
Here's an excellent article in Forbes
Presently, we (in the US) have subsidies, credits, deductions, tax surcharges, earmarks and research boondoggles. Here's a way to make life simpler: Chuck out all energy legislation, replacing it with a one-sentence statute that levies a tax on carbon emissions.
We're talking a lot of revenue--enough, if the full rate were in place today and no one responded with changes in air-conditioning and driving habits, to replace the personal income tax. It would add $1.65 to the price of a gallon of gasoline. It would triple your electric bill if your utility were entirely coal fired. The purpose, though, would be not just to raise revenue but to change behavior. In 30 years' time, coal utilities would get very imaginative about switching to nuclear or finding some way to stuff carbon dioxide down a well hole. You would have long since retired your Suburban.
Now think of the legislative pollution that could be removed. The guzzler tax (up to $7,700) could be repealed; it is, after all, none of the government's business whether I waste gas by driving a big car or by making unnecessary trips to the pharmacy. Repeal mileage regulations (27.5 miles per gallon for cars, 21.6 for pickups). Get rid of the hybrid tax credit (up to $3,400). Forget George Bush's plan to spend $1.2 billion on hydrogen and $150 million on grass clippings.
We could find other employment for the lobbyists who tell us that ethanol is a winner; now, for the very first time, the chemical would succeed or fail on its own carbon merits. We wouldn't need the $2,000 solar credit or the $150 for qualified water heaters or the $50 for advanced circulating fans. We wouldn't need the tax forms for any of these things.
and...we would not need all those bureaucrats at the Energy Department.
This is not to say that a) the bureaucrats wouldn't think of ways to spend the revenue, b) wouldn't get rid of the legislation it is supposed to replace
The problem is, it's the government. If they pass a carbon tax, they will make none of those other changes. IF they first would abolish all other environmental regulations on the energy industry, the idea might have some merit. For example, you suggest that coal-fired utilities might change to nuclear. How could that happen in the current regulatory climate? The real problem is that the libs intend to use a carbon tax destroy modern industry, not change it. Wake up and smell the woodsmoke.
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