By Michael Jessen
Paul Martin got it half right. The Canadian Finance Minister's second surplus budget drenched people and corporations with long-awaited tax reductions, but missed yet another chance to pay down the nation's environmental debt.
We live in a country with almost no wild salmon or cod fishery, farmers living in crisis, a forest industry caught in red-tape paralysis, smog in the big cities, and contaminated sites in the little centres. The best Martin could do is throw a few hundred bucks back to us and hope we won't remember his face as the same guy who has robbed us for the past six years.
Sure he has promised $685 million over the next four years for the "promotion of environmental technologies and practices," but that is only one third of the new $1,900 million in defence spending and just slightly more the $640 million allotted to furthering international cooperation. Seems like Martin has totally forgotten about the war on the deteriorating environment.
With a tax system based on raising revenues from those least able to resist, Martin undoubtedly finds it hard to give up the habit. As Louis XIV's financial advisor, Jean Baptiste Colbert, once said: "The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing."
As 21 European countries have discovered it doesn't have to be this way. Germany, the Netherlands, Sweden, Denmark, Norway, Hungary, and 15 other nations all levy a variety of environmentally related taxes and charges. Through the European Union these countries are focusing on the way tax policies discourage work, investments, and savings. They are reducing some income and payroll taxes and increasing consumption taxes, including pollution taxes. The result is increased economic efficiency, environmental protection, increased employment, more competitive companies, reduced waste, and more efficient use of resources.
A recent evaluation of 16 environmental taxes in the EU found the taxes to have been environmentally effective and to have achieved their objectives at a reasonable cost. Examples of particularly effective taxes are those on Swedish air pollution; on Dutch water pollution; and the nitrogen oxide charge and tax differentiation schemes for vehicle fuels in Sweden. The European Environment Agency study found environmental taxes to be particularly effective in incorporating the costs of environmental services and damages (and their repairs) directly into the prices of the goods, services or activities that cause them. They were also found to "provide incentives for both consumers and producers to change their behaviour towards a more 'eco-efficient' use of resources; to stimulate innovation and structural changes; and to reinforce compliance with regulations," the report stated.
Of course, no one wants to pay additional taxes so the idea with environmental tax shifting is to recycle the tax revenue as rebates to those who pay the taxes or as reductions in existing taxes and fees. (In other words, to be revenue neutral.) As long as they are implemented in consultation with all stakeholders and introduced gradually, the benefits far outweigh any problems.
The BC government has issued an Environmental Tax Shift discussion paper and is co-sponsoring with Selkirk College a tax shift workshop on March 15 at 7 p.m. at the college's Silver King Campus in Nelson. Admission is free to the workshop and will include a panel presentation and an open discussion. Some of the possible tax shifts to be discussed include auto insurance based partially on vehicle usage, a variable sales tax to reflect the wastes associated with different products, and higher property taxes for land uses like parking lots, landfills, and pollution-intensive industries.
If Paul Martin would only listen to the groups that have been promoting "green" tax shifts since 1989, Canadians could enjoy the double dividend of lower personal taxes AND an improved environment. Maybe some of the first steps will be taken in BC.
ONE SMALL STEP - You can help develop a constituency for environmental tax shifting. The BC discussion paper can be found on the web site http://www.fin.gov.bc.ca. Copies may also be available through MLA Corky Evans' office at 352-6844 or the Nelson Chamber of Commerce office on Hall Street. You can register for the workshop by calling Continuing Education at Selkirk College at 352-6601. The European Environment Agency web site is at http://org.eea.eu.int/.
RESOURCES - A number of good resources about tax shifting are listed in my column of October 29, 1999 entitled "Eco-Taxes and Perverse Subsidies." It is available at http://www.toenail.org/articles/column89.html. The book "Tax Shift: How to Help the Economy, Improve the Environment, and Get the Tax Man off Our Backs" by Alan Thein Durning and Yoram Bauman, published by Northwest Environment Watch in 1998 is highly recommended. Here is an excerpt: "In general, economics tells us that when you tax something, you get less of it. Our problem is that we tax things we want more of, such as paychecks and enterprise, instead of things we want less of, such as toxic waste and resource depletion. Naturally, we get less money and more messes. Tax Shift is about doing the opposite--removing taxes from "goods" and putting them on "bads." This book is not about raising or lowering taxes overall. Whether you think government is too big, too small, or just right, tax shifting is a revolt that makes sense: it gets taxes off our backs and onto our side." Also on the highly recommended list is the Environment-Friendly Taxes Organizer Kit available for $8.50 from Sustainable America, 42 Broadway, Suite 1740, New York, N.Y. 10004-1617 (Ph: 212-269-9550 or Fax: 212-269-9557) or visit their web site at http://www.sanetwork.org or e-mail to email@example.com. Other recommended reading includes "The Ecology of Commerce" by Paul Hawken, especially Chapter 11 entitled 'Pink Salmon and Green Fees.' Sustainable Minnesota, a project of Minnesotans for an Energy Efficient Economy has an excellent list of resources about ecological tax reform on their web site at http://www.me3.org/projects/greentax/. The Banneker Center for Economic Justice has a web site billing itself as the worldwide guide to all sources of information about the Green Tax Shift. It can be found at http://www.progress.org/banneker/shift.html. The Center for a Sustainable Economy has an environmental tax reform resource guide at http://www.sustainableeconomy.org/resourceguide.html. A good general introduction to the issue can be found in the report "Towards a Sustainable Economy: Grounding and Integrating Themes in Environmental Economics" published by the Pembina Institute in June 1998. It is a free Adobe Acrobat download from http://www.pembina.org/pubs/default.htm.
Michael Jessen is a consultant who owns toenail environmental services. He can be reached by telephone at 229-4621 or by e-mail at firstname.lastname@example.org. His firm's award-winning web site can be found at http://www.toenail.org/.
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