By Ray Rivers

March 7, 2015

BURLINGTON, ON

Ontario’s minister of the environment. Glen Murray, might have chosen a better winter. He has announced province-wide climate change consultations as a prelude to developing a new strategy. But after the coldest winter in ages he may well get a cool reception from folks who haven’t warmed up to the difference between weather and climate.

The Province has released a discussion paper as a starting point for consultations. This is one of those primers on the topic – a sort of ‘climate-change-for-dummies’. It is more style than substance, to be sure, but the paper does crawl up to a bottom line. A carbon tax is on the horizon for Ontario!

There is a direct connection between this picture and the one on the right.

What does a person who cares about the environment and is prepared to pay to preserve the plant we live on do to keep the northern environment?

Carbon taxes are anathema to our federal government. We recall how Mr. Harper shredded Liberal leader Dion for making a carbon tax the centerpiece of his election campaign a few years ago. And Harper, we know, had spent his earlier days as a climate change denier, though today, as PM, he has to give some lip service to the phenomenon. Besides he is the man who has never seen a tax he liked.

But that isn’t how the nation’s provincial jurisdictions see it. Gordon Campbell may have come from the same place as Harper when he first came into power in B.C. several years ago, but he quickly came to understand the issue. Performing an almost perfect 180 degree back-flip, his government became seriously committed to the environment, and climate change in particular. And the centerpiece of his program was a ‘revenue neutral’ carbon tax. In turn, the B.C. public has vindicated his decision and endorsed the tax by supporting the Liberals at the polls.

Quebec also has a carbon tax and Alberta has a ‘cap-and-trade’ emissions trading regime, which works as a kind-of carbon tax. Ontario has been toying with the idea of joining a couple of US state-led emissions trading initiatives, or starting its own emission trading program. But unlike some other provinces, Ontario is still standing by the water’s edge with one foot in the water in this regard.

Not that anyone should dare criticize Ontario for lack of action. The province didn’t need a carbon tax or cap-and-trade program to score the most impressive GHG reductions in North America. While emissions have increased in most of the other provinces, and soared in Alberta, Ontario’s emissions plummeted to 6% below its 1990 levels. Had every other province followed Ontario’s lead, Canada would have been able to meet its Kyoto international obligations instead of throwing up our hands and becoming the first nation to withdraw from the global treaty.

If you can’t get the puck into the net you might try moving the goal posts. That has been Canada’s approach to defending climate change inaction with this PM, who, in fact, has a book on hockey to his name. But moving the milestones to 2007 just makes Ontario’s performance look better with an impressive 17% reduction.

So if Ontario is already the most valuable player in the league, why do we need a carbon tax? Cynics might speculate that the provincial government is just looking for a new ‘cash cow’ to reduce the provincial deficit and debt. And as to a new tax – well it’s a bit like Molière’s ‘bourgeois gentilhomme’, who striving to become a gentleman and speak in prose, finally realizes that he’d been speaking it all his life.

For example, our healthy electricity rates reflect the shift away from lower cost dirty coal. Isn’t that a carbon tax by another name. And aren’t the HST and federal excise tax, charged per litre at the petrol pump, just a carbon tax by another name? How would a new carbon tax be any different? In the end B.C. and Quebec’s fancy carbon taxes amounted to not much more than jacking up consumer costs at the pump.

It might be a nice photograph – but it is not by any stretch of the imagination a pretty picture.

The theory behind the carbon tax is that it dis-incents the use of fossil fuels, and the consequent release of emissions. Sales taxes are consumption taxes. They discourage consumption so they are good tools from that perspective, as we have seen with declining tobacco sales. But sales taxes, like the HST, are not without their consequences.

It’s called the income effect. Consumption taxes hurt lower income tax payers more that those who are well endowed. This inequity has earned sales taxes, also called indirect taxes, the title of ‘regressive’ as opposed to ‘progressive’ – which is what economists call income or inheritance taxes. Progressive taxes are more socially equitable since one pays taxes in keeping with one’s ability to pay.

B.C.’s effort at ‘revenue neutrality’ trades off consumption taxes for income taxes and inevitably hurts lower income residents, notwithstanding its overall popularity. Those wondering why the wealth spread between the rich and the poor in this country has sky-rocketed over the last couple of decades need only to look at Brian Mulroney’s trade-off between introducing the GST and reducing progressive income taxation.

For a carbon tax to be effective, there need to be alternatives to fossil fuels. The public needs to have the means to shift to public transportation and/or afford and accept the myriad of emerging electric and hybrid vehicles. Further, any such tax has to be big enough to catch people’s attention, so they’ll seriously consider making the shift from the status quo. Otherwise they might as well continue driving that guzzler, grumbling about the high costs and voting for the other political party at the next election.

Having been cultured for over two decades on the evils of taxation, Ontario residents can be expected to resist the imposition of a new carbon tax. However B.C. has shown that making the the new tax revenue-neutral can induce public acceptance. And this acceptability can be enhanced by demonstrating that the proceeds of the tax have been applied to furthering emissions reductions, not simply taken as another tax grab to get dumped into the provincial treasury.

It is not everyday that a government anticipating a new tax, invites broad public participation in helping it make that decision. The links below include access to the discussion paper as well as other background. It behooves us to respond to this invitation by the Wynne government, a government that has shown itself to be inclined to action, rather than just philosophizing.

Climate change is a serious matter with potentially dangerous outcomes, regardless of how much today’s weather may have seduced us into inertia. We owe it to the next generation to participate.

Ray Rivers writes weekly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking. Rivers was a candidate for provincial office in Burlington where he ran as a Liberal against Cam Jackson in 1995, the year Mike Harris and the Common Sense Revolution swept the province.

Background links:

Climate Change       Consultations      Climate Change Paper      Carbon Tax

Carbon Tax and Keystone     Quebec’s Carbon Tax      More Carbon Tax –

Fuel Taxes     Moliere

By Ray Rivers

March 2, 2015

BURLINGTON, ON

That title has to be taken tongue in cheek.

British author Maria Lewycka provides a valuable look into Ukrainian society through her charming novel about Ukrainian tractors. Although trade between Russia and Ukraine has pretty much come to a halt, except Russian gas, following Russia’s invasion, the economies of the two countries had been closely intertwined during the days of the USSR. As ironic as it seems today, Ukraine had been a major provider of military equipment for the Soviet block, including rocket and helicopter engines, and even tanks (tractors in the book).

At the moment it is like watching a school-yard bully kick the crap out of a smaller kid and steal his lunch money. And we in the west are holding a ring-side seat, frozen by the obscene spectacle and hoping, in vain, that the irrational aggressor will come to his senses. Having expressed our concerns and imposed some mild sanctions to ease our guilt, we find ourselves shouting words of encouragement from the sidelines but are hesitant to help with significant material substance.

Similarities to Germany’s 1938 invasion of Czechoslovakia are eerie. Russia, unable to control its lesser neighbour, has invaded on the flimsy and false pretext of protecting the linguistic rights of Russian speakers there. But in this the truth lies somewhere else. The cunning Vlad Putin is either unable to distinguish between fantasy and reality, or is so bent on aggression against his neighbour that it doesn’t matter.

It might look as if Russia’s invasion was part of a greater long term strategy, which recent evidence shows it was. Back over a year ago there were rumours of Russian parliamentarians exploring Hungarian and Polish interest in the division of Ukraine – in the spirit of Stalin and Hitler’s pact to divide Europe between them (Molotov–Ribbentrop Pact).

The former Ukrainian president Yanukovych, elected in 2010, was essentially Putin’s puppet. He ran down the military and the economy, making the country vulnerable and weak, and ripe for the ensuing aggression. Under Kremlin pressure he cancelled plans for the Ukraine to join the EU, which ordinary Ukrainians had regarded as their last hope of rescuing their failing economy and ending corruption.

When the people protested, he called on Putin to help him. And Putin apparently complied providing sharpshooters who killed over a hundred of the protesters. Then fearing for his life and having lost his moral authority in parliament, by even his own party, Yanukovych fled to Russia, taking the federal treasury ($40 billion) with him. Interpol has recently issued a warrant for his arrest.

Crack Russian troops invading the Crimea.

While Ukrainian parliamentarians were sorting out how to govern, and with the conclusion of the Sochi Olympics, Putin made his move. First he invaded and annexed Crimea and then moved into eastern Ukraine. As the recovering Ukrainian army was in the process of expelling the pro-Russian forces in the east last summer, Putin uncloaked his military might, sending in his crack troops, modern tanks and advanced weapon systems to defeat them.

A desperate Ukraine agreed to a ceasefire freezing battle lines (Minsk). However, the Russian president, despite all his denials, ignored every aspect of the agreement. He continued to send more troops and advanced weapons to ensure that the out-gunned Ukrainians would not be able to retake pro-Russian seized territory, and allowing his forces to continue grabbing more land.

Then there is the matter of the Russian missile which knocked down a Malaysian airliner last summer, killing all 300 people on board (including a Canadian). Since the rest of the world seems impotent to deal with this event, it will likely require legal action by the aggrieved victims’ families to register some measure of accountability. And there is now evidence that Putin’s people have been conducting a terrorist campaign, planting bombs all over Ukraine, including at a recent peace march.

Putin has been jailing or exiling all of his political opponents over the last few years, as he has steadily moved Russia back towards autocracy. On Friday his most effective opponent, in fact his once former deputy prime minister, was gunned down in a professional assassination – reminiscent of KGB contract killings.

Vladimir Putin’s Russia is the antithesis of the way we in the west believe a major military power should behave. Yet nobody is prepared to stand up to him in any meaningful way – in any way that might change his behaviour. Putin told the west that sanctions would not work and they haven’t. Yes, sanctions and lower oil prices have hurt the Russian economy, but Putin is not going to be swayed by economics.

Putin won’t stop until he is stopped. Ukrainians know this but nobody else seems to get it. Obama, Merkel, Hollande, and even our own Harper, keep saying that there is no ‘military solution’ to the crisis. But they couldn’t be more wrong, as events have shown. The former KGB agent is all about his military might. To get his attention he needs to believe that his military could fail to meet its objectives. Negotiating terms with Putin is a one way street, with the traffic going only in his direction. Call this kind of negotiation what it is – appeasement.

Appeasement failed to stop Hitler in 1938 (Neville Chamberlain in Munich) and it will not work in Ukraine (Minsk). Ukraine has asked the west to supply it with modern weapons to defend itself against Russia’s unprovoked military aggression. Ukraine is in the process of a massive mobilization of its youth, but needs training and modern weapons for its conscripts to be able to defend themselves. We in the west, including Canada, have that technology in spades.

Ukraine became a source of agriculture for the |Soviet Union and Europe. They were never quite as good as the Massey Ferguson tractors Toronto factories shipped to farms throughout Western Canada

Canada has always had a special relationship with the Ukraine. After all this country has received more Ukrainian immigrants than anywhere else outside of Russia. Ukrainian-Canadians have recently been coming out to help the country of their heritage, including joining troops on the front line against the pro-Russian military forces.

Ukrainian-Canadians know we have the ability to supply the training and arms that Ukraine needs, or that we should be able to help influence other nations to move in that direction. There is no partisanship here. Every single Canadian government has supported Ukraine’s struggle for independence, including making us the first nation to recognize the new country after the breakup of the USSR.

Stephen Harper has been among the most vocal anywhere in defending the sovereignty of Ukraine. We have offered some financial assistance and some non-lethal military supplies. But our Ukrainian Canadians, who have become some of the PM’s staunchest supporters, know that we can and should do much more.

Ray Rivers writes weekly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking. Rivers was a candidate for provincial office in Burlington where he ran as a Liberal against Cam Jackson in 1995, the year Mike Harris and the Common Sense Revolution swept the province. Rivers describes himself “as of Ukrainian extraction”.

Background links:

Ukrainian Tractors     Soviet-Nazi pact     Invasion Strategy     Appeasement Failure

Breaking the Ceasefire     Breaking the Truce      Mis-reading Putin     Need for Weapons    Putin

Full Scale War     Russian Contract Killing     Russian Terrorism     Putin’s Plans     Canada’s Role

Price of Appeasement

Canadians in Ukraine     Canadian Persuasion