Duncan spends, we pay the HST on heating

by Christina Blizzard, Toronto Sun
TORONTO – Get out the sunglasses.  It must surely have been one great, blinding light that caused Finance Minister Dwight Duncan’s conversion.  He’s no longer a tax, spend — and rack up massive deficit — kind of guy.  Suddenly he’s outraged with the NDP and Tories for suggesting the government give $350 million in HST tax relief on home heating.  The guy who doubled the provincial debt in eight short years, and is looking at an estimated $18 billion deficit this year, has got religion on fiscal responsibility. Read article

31 thoughts on “Duncan spends, we pay the HST on heating

  1. Both the Ontario Clean Energy Benefit (OCEB) and cutting the PST on heating bill are bad, bad ideas.

    A house with:

    – electrical consumption of 12,000 kWh per year and an all-in cost of $ 0.16/kWh pays $ 1,920/year; OCEB saves them $ 192
    – heating bill of $ 1,500 all-in; no PST saves them $ 106 (backed out from tax-inclusive amount)

    That $ 298 must be found somewhere — let’s not kid ourselves.

    Consider that each 1,000 MW of renewables (based on current FIT rates and an assumed mix) will add about 0.3 cents/kWh to the cost of electricity — add HST and ignore the OCEB and the additional annual cost for the above home is $ 41.

    Ditching 7,300 MW of renewables, i.e. stopping the FIT program in its tracks, would provide the same benefit as the OCEB and no PST on heat ideas, without costing taxpayers a dime. The locusts could go somewhere else to feed.

  2. The column garbles together McGuinty’s tax policy, his spending record, his management of the power system, and the cost of education reforms. The HST consumption tax is much more efficient than the taxes is replaces in large part because the design of the tax is less oriented to picking winners in the economy. Just because McGuinty has been irresponsible in spending money and cancelling (but not cancelling) needed power plants doesn’t prove that applying the HST to fuels is evil. Test the shallowness of Blizzard’s moralizing about how taxing fuels is “just wrong” by asking whether it is “just wrong” to keep the tax on home insulation.

    • What tax did the HST on home heating replace?

      Blizzard wrote “Adding a consumption tax to everyday necessities is just wrong.”

      Well, until July 1, 2010 there was no provincial tax because that was considered to be ‘just wrong’

      Perhaps everything has changed, because a government that has no concept value must have another $300 from each household.
      Unlikely.
      It’s also not true that get that from each household, as there were a number of programs, primarily for lower income households, to offset the impact of higher energy bills.
      Ignoring right and wrong, that’s the reason one inquisitive economist found energy consumption taxes do little, aside from expanding the bureaucracy:
      http://ep.probeinternational.org/2011/05/18/aldyen-donnelly-the-indispensable-report/

      • Gotta admit I skimmed it but the EP post seems to be saying that taxes on energy are regressive. The programs you mention then help to deal with that, at least to some extent.

        I’m still for the concept “tax more what you want less of and tax less what you want more of”. It’s been tried recently and unfortunately it didn’t go over too well.

      • Numbers Guy, I’m for that same concept.
        I think electricity is the cleanest energy most of us access — so I don’t think it should have been taxed. Then again, I am not opposed to carbon taxation; I think that is a far more defensible option than energy taxation.
        Energy taxes are regressive – by definition. The lower the household income the greater the % spent on energy. That isn’t the same as the point I’d make – which is that poor households would spend the money anyway, and it would have a higher velocity spent in the private sector than gobbled up as tax.
        Taking money from the poor may be ‘wrong’ – but its also probably a foolish thing to do to the economy.

      • A carbon tax and an energy tax are the same thing.
        Programs to help the poor deal with rising energy bills are paid for by everyone else through higer taxes and/or higer energy bills.
        Carbon or energy taxes are tools employed in energy demand-side management to reduce consumption of energy. And rationing and conservation are other demand-side management tools.

      • Scott, hear, hear on those nasty carbon taxes. It would go right back into OUR pockets via lower income and corporate taxes, rather than the wealth concentration and transfer that occurs with FIT.

        Barbara, yes providing help to those who need it costs everyone a little bit but isn’t/shouldn’t that part of being Canadian ? A household with an income over some appropriate threshold amount doesn’t need the help. Blanket discounts and avoided taxes are vote buying measures that cost a lot and inappropriately shift costs from ratepayers to taxpayers. Re: DSM, I’d rather have high prices (with some amount that flows back to citizens and companies) drive it that pay out exorbitant grants, many of which go to free-riders, i.e. the majority who would have done projects without the incentive.

        The bottom line is that too people want to try to have their cake and eat it too. As Dana Carvey might say “Wouldn’t be prudent”.

      • Does anyone know of a tax collected that went back to the people who payed the taxes in the first place?
        Being a Canadian should mean that energy is provided to all people at the lowest possible cost. That way the poorest would not need money from the government/taxpayers to pay their energy bills. You propose a share the misery scheme.
        Canada is an energy rich country so their is no need to reduce energy consumption excepting to make planet earth sustainable if you subscribe to this viewpoint.

    • Winners in the economy ?
      Come on now.
      I can chose to walk by a clothing store , do without a TV.
      But I need to keep my home warm and I need power….and I need to get back and forth.
      It is a luxury to go out to a restaurant.
      The HST is a tax grab , plain and simple…sorry Tom , Applyiong more TAX to fuel is flipping EVIL.
      Everyone makes out the old system to be complicated…. anyone ever heard of computer software?
      The spin isn’t just happening with ECO nonsense.

    • Putting the HST on energy has helped to drive up the cost of food in Ontario.There is no good reason for reducing energy consumption in Canada unless one subscribes to the Greenpeace and UN Chicken Little stories about how the world is going to burn up.

  3. Ontario energy policy is based on demand-side management. Increasing taxes on energy is used to reduce the demand for energy and thus cut consumption by making energy less affordable.

  4. I can’t believe anyone would buy into a carbon tax…..but there you have it.
    But people buy into windmills and wind parks and how Environmental Lobby Groups are going to save the world for us….with some of my money of course.
    Lets keep investing in other peoples future……

  5. Remembering Cancun!

    http://www.youtube.com/watch?v=q83CQ_7CGCg

    Jetting to the ‘sun’ – again!
    November 28th in Durham – South Africa

    U.N. freaking out!
    Kyoto expiring –
    U.N. now desperate for another treaty.

    Mr. Harper has expressed no interest in signing Canada on.

    p.s. Video’s from Durham should be ‘spectacular’
    p.p.s. Mark your calendars!
    p.p.p.s. Al Gore can’t wait! He’s single now!

  6. Carbon discussions have to be viewed as a business commodity product.
    A business comes up with a product..in this case CO2
    First there has to be a consumer value attatched to it….hence the “green” push like polar bears.
    Without this value added…you have no commodity value.
    In this case the commodity is “air”.
    In simple terms , people are paying for air.
    In order to sell the consumer on a value for air , you have to invent or create a market.
    IWTs fall into this category as well.
    Without this value or market created by PR , no one in their right minds would be stupid enough to pay 3 times more for a product “electricity” than they have to.
    Not one IWT would be erected if the company that invented them came out with them and said hey folks , I can make energy with this but it will cost you 3 times more for it and lay waste to your rural areas, and make some people sick , but you will have to rebuild your entire grid system because it doesn’t always work , and it may require you building back up power for it if you need on demand power.
    Now would they ?
    So an entire market has been created for demand.
    Just as the carbon market , through 10 years of careful PR.
    So a value has been attatched to air , becoming a commodity and an entire industry has been built around “air”.
    Industries to study it , measure it , police it , sell it , protect it ? ,
    Enormous redistribution of our money is going towards this industry.
    We fund the PR of planting trees in city landscapes , take children out to parks and have them plant seedlings and they go home feeling warm and fuzzy…….meanwhile Rainforests are decimated to grow corn or soy , or we cut down trees to sell to Japan or China.
    People put it IWTs in CAW centres to play up the impression that we have it all under control and we are making a difference…..but it will cost you more..but it’s for a good cause.
    Make any sense to anyone?
    It’s a birth of an industry that can do absolutely nothing , but will keep costing us all to look like things are being done.
    But there is a purpose for this segment of the industry of “air”. They value add.
    So this part of this industry is the PR arm of the commodity side of pricing air as a commodity.
    IPCC is a perfect example.

  7. It all computes when you consider the underlying goal. That is to increase a market to sell a product. Any product , toasters , can openers , cars , TV’s , clothing , Credit cards etc.
    We have reached saturation point…global corporation growth is only possible by using your money you need to provide a better life for your children and redirect it to build economies in countries that require your hard earned money to create jobs there , so those people can be sold stuff.
    You get poorer , your services your taxes should be going towards are redirected , while the new markets begin growing. The problem with all this is unless you have natural resources to sell , they don’t need you. Just your money. For the average person living in Ontario , as a economic future is concerned, there is nothing in it but poverty and job loss.
    It was a matter of time , but there is open talk now of how much better the environment would be if people of emerging nations were better off.
    Canada has 34 Million people….India 1.5 Billion…..Africa at 1 Billion…..do the math.
    And it applies to IWTs..because IWTs may a way to get power to many places in Africa or India.

  8. Clearly there’s a lot of resistance to carbon taxes on this site.

    I must confess that I haven’t crunched all the numbers but believe in my heart of hearts that Ontario’s electricity consumers would be far better off with a carbon tax (at a level suggested by an entity such as the National Round Table on the Environment and Energy) — rather than FIT rates.

    • Hey – The Energy Numbers Guy!
      In answer to your confession:

      Sounds Wonderful!
      That would mean Ontario citizens – would be entitled to a ‘hefty monthly refund –
      because – we’ll all be living in the ‘cold and dark’ – due to issues concerning –
      inability to pay – skyrocketing ‘heat and hydro’ rates; therefore,
      cutting our “carbon footprint”.

      Sounds heavenly!
      Please send carbon refund!
      And make it quick!

      Wait –
      Where do I buy a ‘carbon credit ticket’?

    • You are proposing to exchange one bad idea for another bad idea.Carbon taxes are in essence a form of rationing by making energy too expensive to buy/use. This is very hard on the poor.Why not just use rationing to spread the misery around? NO! Not wanted because rationing would not bring in new money to the government like Carbon taxes do.

  9. A program(s) to provide help to the poor exist and deal with the problem you point out. When it’s limited only to those in need the cost is much lower than giving a handout to everyone (that just amounts to giving money to ratepayers and asking taxpayers to foot the bill).

    The two “bad ideas” I reference at least try do something to deal with a problem. If you are saying that there is no problem (energy rich … lowest cost possible) then discussing this is, from my perspective) a waste of time..

    • What problem is it that you think needs to be dealt with? Indeed, Canada is one of the richest energy countries on planet earth so there is no need to restrict energy consumption. It’s also a cold country that requires much more energy consumption than warm countries do. There is no need to place a heavy energy/carbon tax burden on the poor in Canada excepting for political and ideology reasons.

  10. Hey – again –
    The Energy Numbers Guy –
    You say:
    “A program(s) to provide help to the poor exist and deal with the problem you point out.”

    Question:
    What poor are you referring to?

    Grab munchies! Lean forward!

    Therefore – Cap and Trade Unconstitutional –

    The Supreme Court of Canada has ruled that for purposes of upholding such an intrusion into areas of provincial authority under the “national emergency” test, the feds must be proposing law that is temporary to address an emergency that is short-term in nature. Clearly, the climate-change issue and the carbon quota solution do not meet this test.
    http://opinion.financialpost.com/2011/04/25/cap-and-breakup/

    Mr. Gore is not a happy Jeremiah.

    Al Gore – Bull $–t’s – into reality!
    http://fullcomment.nationalpost.com/2011/08/20/rex-murphy-global-warming-runs-out-of-gas/

    p.s. Al Gore bought (another) ‘carbon ticket’ yesterday –
    to ‘off set’ his Bull $–t’s!

    • Free Thinker:

      When I read most of your comments, I feel like I’m reading the first part of The Sound and the Fury.

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