It's the pocketbook, stupid.

Date01 August 2019
AuthorCirtwill, Charles

Experts across the country are trying to understand how they lost the argument about the carbon tax. The evidence is overwhelming that a broad-based carbon tax is the most effective and least costly way to shift from a carbon-intense to a carbon-alternative economy. Yet, in province after province, governments are choosing the less effective and more costly alternative of regulation combined with carbon pricing for high emitters.

A considerable amount of navel-gazing and finger-pointing will now take place, but the answer is right there for all to see. It's the pocketbook, stupid. Voters are not prepared to accept another "tax on everything," especially when another politician is prepared to offer them the alternative of a higher tax on some things which, at least in the first instance, someone else will pay.

In the latest national polls "cost of living" is cited as the number one issue heading into the federal election this fall. For economists, being concerned over "cost of living" makes little sense as inflation has been stable at around two per cent for over 20 years now. For political scientists, the sudden appearance of "cost of living" on lists of ballot box questions traditionally dominated by health care or education is quite the shock.

To the average Canadian, this is not a surprise at all. Whether it is housing in Toronto, gas in Kenora, or property taxes pretty much everywhere, the money going out rises every year and rises faster than the money coming in.

This is abundantly clear to a parent struggling to afford the monthly childcare costs in any province but Quebec, or for a worker at one of those centres (even in Quebec) trying to save for a house. This reality has repercussions for political strategy and public policy.

Consider the NDE They have fallen into fourth place nationally. For better or (mostly) worse the NDP is largely seen as the party of high taxes and high spending. The strange thing is that, in government (at the provincial level), the NDP has the best record of fiscal prudence of any of the parties. Were I them, I would be the one trotting Janice Mackinnon out at public events, as opposed to letting her be co-opted by my political opponents.

Mackinnon was Roy Romanow's (NDP) finance minister and is widely considered to have the best record of matching spending to revenue of any finance...

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