‘Lack of climate change consensus’ puts feds, Alberta, on collision course

Media Appearances, Climate, Frontier Centre

Source: Edmonton Journal, Wednesday, May 12 2010

Equalization and climate change policy are two areas of increasing federal-provincial tension. Albertans want their province to play a leadership role in finding solutions. 

Albertans are generous. I believe most Albertans support the premise of equalization, so that residents of all provinces can have roughly equivalent programs for roughly equivalent tax rates. If the amount Ottawa collected and redistributed to other provinces began and ended with this premise, there likely would be no complaints from Alberta.
But that is not where it begins and ends. Because Alberta has historically had a booming economy and a high workforce participation rate, we pay to Ottawa more corporate and personal income tax, more EI and CPP premiums, more fuel tax, more GST and other federal taxes than other provinces. We also get back far less in federal transfers and spending. In the latest calculation this fiscal transfer amounted to about $20 billion — which is equivalent to more than 50 per cent of own-source provincial revenues.
A recent study by the Frontier Centre for Public Policy shows Ontario and British Columbia have a similarly large fiscal imbalance, and that recipient provinces are able to enjoy a level of services that is not available in the provinces of these three contributors. Quebec post-secondary students enjoy tuition rates that are less than half of what Alberta students pay. Quebec parents enjoy a highly subsidized daycare program that is not available in Alberta. Quebec has more nurses, doctors and teachers than Alberta. And Quebec consumers enjoy subsidized electricity rates from their Crown hydro assets, which would otherwise provide a healthy source of revenue for the provincial government. This is not fair and it is not sustainable.
A Wildrose Alliance government would embark on a national discussion to rebalance tax revenues between Ottawa and the provinces, so provinces have enough tax points to generate sufficient revenues locally, and greatly scale back the amount of federal transfers.
The scientific debate on climate change is far from settled. There is no scientific consensus on the extent to which man-made emissions of carbon dioxide are affecting the climate, on what the ultimate effects of warming will be, on how quickly warming will occur, and on what policy-makers should do to address it. With so much left unsettled, we need an honest and comprehensive discussion on what reasonable options we as a nation, will pursue.
A national cap-and-trade program is not in Canada’s interest, and it is certainly not in Alberta’s interest. A study by TD Bank, in conjunction with the David Suzuki Foundation, found that immediate aggressive action to curb carbon dioxide emissions would be “the biggest fiscal shock in Canadian history.” By 2020, Ottawa would be raking in $46 billion to $72 billion per year — a cost that would fall disproportionately on Alberta. This is clearly not in our province’s interest.
It is also not a reasonable option to shut Alberta’s oilsands, as some eastern Canadian political leaders have suggested. Oilsands development benefits all of us. Modelling from the Canadian Energy Research Institute suggests oilsands development over the next 35 years will generate an additional $34 billion in tax revenue for the federal government. It will create more than 67,000 jobs per year, including manufacturing jobs in Ontario and Quebec. It will provide a safe supply of energy to meet North America’s energy security needs. It is a resource that will be developed, and the industry will continue to make technological improvements to develop the resource with the least impact on the environment.
From the perspective of reducing Canada’s greenhouse gas emissions, targeting oilsands is not the most sensible place to start. The sensible place to start is to have a meaningful discussion on what is actually achievable. The federal government’s Copenhagen proposal to reduce emissions 17 per cent below 2005 levels by 2020 is likely not achievable, so why pretend otherwise? Setting the right target has to be the first step in discussing how to go forward on collective action.
The second point is to be honest with consumers on what the cost of achieving the target will be. So far, politicians have pretended these costs can be loaded up on large emitters of greenhouse gases with no effect on consumer prices. That is simply not true.
Gasoline prices, power prices and home heating costs will increase, and consumers need to understand the implication of policy decisions on their household budgets before any decisions are made.
Finally, we need to pursue the least expensive options first. Switching to natural gas for many of our energy needs, now that prices are low and supplies are plentiful, should be a key part of our national plan to reduce overall emissions. Creating incentives to assist consumers in greening their homes and cars and to assist firms in greening their buildings and fleets should be the second aim. A Wildrose government would embark on a national discussion to get agreement on reasonable, cost-effective and achievable targets for greenhouse gas emissions.
Wildrose was developed to be a right-of-centre alternative to the Progressive Conservatives. We were created to fill a void in the political spectrum. Now it is up to us to change the direction of our province and, if we are successful, to help chart a new, positive course for federal-provincial relations.