On Tuesday, Stephane Dion spoke to a packed hall in Winnipeg South Centre, a riding that is expected to be fiercely contested in the next election. Instead of demonstrating strength and vision, the Leader of the Opposition exposed his weaknesses and the fragility of his platform.
The topic of the meeting was Dion’s Green Shift plan. Despite promoting this tax on carbon production, Dion conceded that a market-based cap and trade system would likely be in the works under a Liberal government. He spent as much time slamming Harper’s policies as he did explaining his own, and in the process revealed a fundamental lack of understanding of economics and government.
His major criticism of the government’s approach to limiting pollution was that it would make emissions more expensive without benefiting the environment. The fundamental purpose of any incentive program, though, is to decrease pollution, and raising the cost of carbon production would intrinsically encourage industry and consumers to look for carbon-neutral alternatives, thereby benefiting the environment.
Dion’s grasp of economics seemed even shakier when he excoriated the government for ending the days of budgetary surpluses. A surplus results when the government has collected more taxes from Canadians than it needs, money that Canadians could be saving or spending themselves. Eliminating surpluses by cutting taxes is therefore an excellent sign, indicating that the government has learned how to get by with less, and is leaving more money in the pockets of Canadians.
The reality of a carbon tax is that it would raise the price of necessities. Most Canadians eat food that has been transported some distance, which would cost significantly more under a carbon tax scheme than it does now. Heating a home is not a luxury, nor is it cheap even today. Few cities provide public transportation adequate to truly replace driving. For everyone but condo-dwellers in the downtowns of big cities, Dion’s carbon tax would dramatically raise the cost of living.
In Winnipeg, Dion argued that this would balance out. The carbon tax, he claims, would be used to finance income tax cuts, including refundable tax credits for households too poor to pay much tax. This may or may not work on paper. In reality, though, there is very little precedent for governments eliminating taxes. The major exception in Canadian politics has been the Harper Conservatives, who followed through on their promise to cut the GST. Dion, on the other hand, pledged to renew efforts to create a national daycare program, and increase subsidies for home renovations. Plans like that don’t come cheap, and make it less likely that a carbon tax would be the basis for a revenue neutral tax reform, rather than simply a massive tax hike.
The standing room only audience cheered enthusiastically whenever Dion slammed Harper, but couldn’t summon up much energy for the man himself. Dion came across in Winnipeg as the stereotypical academic that he used to be: brainy but disconnected from the people he hopes to lead, uncomfortable speaking off the cuff, and more suited to lengthy discussions about theory than to implementing solutions.
A platform can’t be built entirely on the environment when Canadians are dealing with healthcare waits, increasing costs of living, and an incipient economic slowdown. Unless Dion and the Liberals figure this out and add some substance to their campaign, the Conservatives could well win a majority this time.