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June 30, 2008
Russell: "A carbon tax is about tax policy, not environmental policy."

Rising opposition to British Columbia's carbon tax reminds me of the story of the politician who, upon seeing an angry mob go by, turns to a friend and says, "Gee, I must find out where they are going so I can lead them there." We simply haven't seen this magnitude of opportunistic populist pandering on the part of various politicians, commentators and interest groups since the Meech Lake Accord. I half expect Preston Manning to leap out from behind a curtain and yell "boo."

As people fall over themselves to run to the head of this parade, all manner of absurdity has revealed itself - arguably, the most bizarre being the provincial New Democrat leader Carole James standing shoulder to shoulder with the Canadian Taxpayers' Federation to oppose a reduction in income taxes.

I beg your pardon.

That's right: a reduction in income taxes. A carbon tax is about tax policy, not environmental policy. It was 70 "economists" who recommended it before the last budget - not 70 "environmentalists." Environmentalists support it. But none has suggested that a carbon tax in and by itself constitutes an environmental policy. That's been a straw man argument constructed by its critics.

Equally irrelevant are claims the carbon tax will reduce gas consumption by increasing pumps price. In this particular case, the private markets - which have increased such prices by more than $0.30 a liter since winter - are already taking care of that. Instead, what is important is the fact shifting from an income tax to a consumption tax gives people more money to spend or save, creating investment capital.

And this particular consumption tax pays particular attention to less fortunate British Columbians - cutting their income taxes by two percent in 2008 and five percent in 2009. And those are the exact same people carbon tax opponents claim will be hurt most by this policy.

Please!

Even if lower income earners weren't going to get a break, the imposition of a modest $0.0241 per liter increase in pump prices during year one of the carbon tax couldn't financially break anyone as some hysterics have been claiming - irresponsibly scaring those already frightened by rising fuel prices.

But it's not my job to tell you that, it's the premier's: something he has failed to do for at least two reasons. First, he decided to spin this as environmental policy maybe to draw attention away from the fact that he has accomplished little on that file. And second, Gordon Campbell has never understood that his primary job is not to develop good policy but to sell it.

To do the latter you must demonstrate some empathy for the province's residents and a willingness to take a "political punch" when you think you're right. Premier Campbell has instead established a reputation for arrogance. And the fact he has remained hermetically sealed even during election campaigns has led many to believe his political jaw is made of glass.

He seems to believe when The Globe and Mail's editorial page, 70 economists and most of the experts are on your side, there's no need to explain a policy to the folks who elect you. History indicates otherwise and Premier Campbell would be wise to heed it.

Twenty-one years ago this past month, eleven first ministers were so impressed at having negotiated a constitutional package that most experts applauded that they forgot to sell it to Canadians. As a result, Meech Lake failed and constitutional change became the third rail of Canadian politics.

Later, much of the accord would be implemented in practice by the very people who benefited politically by opposing it (our current federal government). So, in the end, the accord didn't fail. Instead, it was those responsible for selling it that did.

While the misinformation and scare tactics of those opposing British Columbia's carbon tax may be shameful, the fact remains that there will be only one person accountable should this policy fail: Premier Campbell.

Being right isn't enough: much better governments than his have been defeated by oppositions that formed worse governments than Ms. James' would. Just think of Louis St. Laurent being replaced by John Diefenbaker or Allan Blakeney by Grant Devine. Those governments were not defeated because they made bad decisions; they were defeated because they made good ones arrogantly.

I'm not suggesting Premier Campbell could lose the next election. But if he lacks the political capital and skill to lower income taxes while taxing the one thing all sane people agree we need to use less of he should start getting worried - very worried.

Bob Russell, a businessman and former civil servant, was chief of staff for the provincial Liberals in Alberta from 1986 to 1989. In 2004, he ran for the federal Liberal nomination in Saanich-Gulf Islands.

Posted by Sean Holman at 02:18 PM
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