Author: claytonwelwood

PRESS RELEASE: BC Libertarian Party Storms 420 Vancouver, Calls for Total Overhaul of Broken Cannabis Laws

VANCOUVER, BC: The British Columbia Libertarian Party welcomes the public to meet and greet with its leadership and candidates during this year’s Vancouver 420 Cannabis Protest at Sunset Beach on April 20th, 2019. This year, the Vancouver 420 organizers have granted the BC Libertarian Party a great corner Booth in Spot #191 for the entire duration of the event. (Refer to: https://420vancouver.com/book)

We believe the BC NDP have completely fumbled the important multi-billion dollar cannabis file to ruinous results, and innocent Canadians continue to get caught in the cross-fire. Furthermore, federal regulations have resulted in cannabis price increases of more than 17% across the country.

If the government’s goals was curtail the black market and squeeze out organized crime, it’s failing badly. So far, it has mainly been government insiders, former police chiefs and major liberal donors who have earned a share in the new government-run industry, while the entrepreneurs and activists who built the original dispensaries and compassion clubs have been shunned and left behind.

One of the first orders of business for the Libertarians in Victoria would be to stop police from arresting people for Cannabis distribution, possession and consumption. We would then work with municipalities to set up legal a framework to allow the Craft industry to “come out of the closet” and flourish in a free market.” – Keith Komar, 2017 Libertarian Party candidate, East Kootenays.

Today, we’re launching a campaign called #FreeMyBud to call attention to the failures of the government’s heavy-handed approach to cannabis legalization. For more info visit: https://libertarian.bc.ca/freemybud

A BC Libertarian government would maintain a light-touch in implementing the legal market. We would apply only the Provincial Sales Tax on cannabis (no sin tax!) and would adopt the minimum federal regulations (barring sales and marketing to minors) without adding to them. This will place cannabis in a similar situation as beer and wine in BC.

The current provincial retail regulations are too onerous, and don’t allow communities enough flexibility in how they deal with dispensaries and other cannabis retailers. A BC Libertarian government would scrap these regulations and allow municipalities to use existing authority to regulate the sale, use, and distribution of cannabis in local communities as they see fit.

For more on our cannabis policy visit: libertarian.bc.ca/issue/cannabis/

The BC Libertarian Party has a strong and far-reaching political platform covering many important issues in British Columbia, including proper cannabis reform. This platform is based entirely on individual freedom, personal responsibility, and a greater number of options for British Columbians across many sectors of public and private life. For details visit: libertarian.bc.ca/issues.

Whether it’s fixing the broken cannabis regulations, abolishing the ICBC dumpster fire, or simplifying and reducing taxes, the BC Libertarian Party has something to offer every citizen across this beautiful province who wants a more free and more affordable life for their families and their communities.

Come speak to the Party leadership and star candidates of the only registered provincial Party that dares to show up to this controversial event at Booth #191.

We want to hear your voices.

CONTACT:
Kyle McCormack – Board Member, 420 Organizer
236-881-7045 For Phone/Radio Interviews

Don Wilson – Party Leader
Email: leader@libertarian.bc.ca

British Columbia Libertarian Party703-1180 Falcon Dr., Coquitlam, BC, V3E 2K7

https://libertarian.bc.ca/freemybud/

The State Giveth, and the State Taketh Away

by Clayton Welwood – Candidate for North Vancouver – Seymour

With an election half a year away, the federal government has started an ad campaign to remind Canadians how much they’re helping them financially. It’s called My Benefits and Credits, and it features heartfelt videos from citizens who are grateful for the GST credits, Canada child benefits, and other payouts from Ottawa.

But as surely as the government gives, it also takes away, and usually the latter more than the former. When I first heard Frederic Bastiat’s pithy definition of the state, it pulled together in my mind a huge tangle of misgivings, suspicions and frustrations I had with the top-heavy, tax-hungry, wealth redistributing, program-for-every-problem nanny states that we live under today. Bastiat wrote, in 1848:

The state is the great fiction by which everyone seeks to live at the expense of everyone else.”

We all know that the state must take more than it gives, but many people delude or console themselves with the thought that some other guy is getting stuck with the bill, while they extract more benefits than they put in, or at least break even.

The truth is, if Canadians of even modest means really scrutize their balance sheet with all three levels of government, all but the utterly destitute will find themselves in the red. If you ask someone, “How much tax do you pay?” they’re likely to think of income tax, and give you an answer like “30%”. The purpose of this post isn’t to convince you that taxation is extortion—if you’ve read this far, you probably already understand that it is. Rather, I hope help you see just what a large chunk of your earnings goes to the government even after they’ve taken up to half your income right off your paycheque (top combined BC/federal income tax rate is 49.8%, and the amount that exempt, a mere $10,682 provincially and $12,069 federally).

Before we get to all the ways governments increase the price of the things you buy, there are a couple of source deductions that are worth mentioning: CPP and EI. These are called insurance premiums, but in fact, they are taxes. With real insurance premiums, you have have a choice of insurance providers and a contract with one of them that gives you a claim on a payout under defined circumstances. You don’t have that with the Canadian Pension Plan or Employment Insurance. All you have is a spot in a welfare line, and the hope that the fund won’t be bankrupt by the time you need to make a claim. Assuming you’ll be eligible for a payout, the rates of return on CPP are terrible, hovering around 2% for people born in the 1970’s or later. Considering the contribution rate is 5.1% of your earnings (and set to rise over the next few years), you’d be much better off investing this money in your own RRSP. And with EI, it’s even worse. If you manage to never get laid off, sick, or pregnant, you’ll never see that 1.62% of your income again! EI, in my opinion, is not much more than a wealth transfer program from some occupations (year-round) and regions (western) to other occupations (seasonal) and regions (eastern) that a particular political party (Liberal) has used to buy a lot of votes with over the years. Those of us who aren’t on the receiving end of this scheme would be much better off if we just stashed that money in our own rainy-day fund, or set up coverage with a private insurer.

Case Study #1: Henry and the Canada Child Benefit

Getting back to the My Benefits and Credits campaign, we hear from “Henry” about how, as a new parent, the expenses just kept piling up and he thought, “there must be programs out there that can help us.” Because, you know, having a kid when you’re in your 30’s and married, is like a totally unexpected financial hardship…Anyways, I don’t blame Henry too much. He’s probably a hardworking guy who’s paid hundreds of thousands in taxes so far and feels it’s reasonable to get a bit of it back at this stage in his life. Not sure what Henry’s situation is, but let’s say he’s making $50k and so is his wife and they’ve got one infant. That would get them around $1,850 in Canada Child Benefits.

What kind of expenses will he and his wife need to pay? A big one is transportation. Let’s assume they’re like most other middle class couples and own two vehicles. Let’s say they each own a Honda Civic, one which they’ve just purchased.

The first thing Henry needs to pay is GST and PST. On the $25,000 purchase, he pays $1,250 GST. Because the purchase price is under $55k, he thankfully pays only 7% PST, $1,750 (instead of 8 to 20% for a more expensive vehicle). There are also some environmental levies on the battery and tires worth about $25.

Then Henry needs to get his new car insured. Because BC has a monopoly public insurer (ICBC) it’s difficult to determine how much extra Henry will pay for insurance over what a private insurer in a fully competitive market would charge. If he was a bad driver, there’s even a chance he’d be getting a better deal with ICBC, but let’s assume he hasn’t had any accidents. He’d probably be paying around $100 per month just for the mandatory liability coverage and fees through ICBC, and his wife, the same, so $200 per month in forced payments to the provincial government.

The other big transportation expense is fuel. Let’s say Henry lives in the suburbs of Vancouver. This means he’ll pay 25 cents per litre in provincial fuel tax, which includes a 17 cent levy for Translink. The feds take 10 cents for their excise tax. The provincial carbon tax, which went up again Apr 1, works out to about 9 cents per litre. Then there’s GST on top of this and the price of the fuel itself, which is about 8 cents with the price at the pumps currently around $1.60 per litre. That’s 52 cents in total taxes, nearly a third of the price per litre. If Henry and his wife spend $250 per month on gas, that’s $81.25 in taxes.

Speaking of the carbon tax, they’ll pay a bit more of it if they heat their home with natural gas. The cost of the carbon tax will also be passed on to them in the cost of pretty much all the products and services they buy in BC, because they all require transportation and building heating. It’d be very hard to estimate this though, so we’ll just look at their direct costs. A sample gas bill shows a typical residential customer paying $77.84 for one month, with $12.71 carbon tax, 24 cents clean energy levy, and $3.70 GST, for a total of $16.65.

We’ll assume that Henry and his wife aren’t drinkers or smokers, thus avoiding the most highly taxed commodities in BC. They will of course pay plenty of sales taxes on the everyday items they purchase, though estimating how much is difficult without knowing their precise consumption habits. Though most groceries are exempt from both GST and PST, they’ll pay both on other essentials like clothing. Let’s just use a ballpark number of $100 per month ($75 GST, $25 PST) for sales taxes paid on day to day items.

So what does the total annual tax bill look like for Henry and his wife, and how does the Child Benefit compare to it?

Expense Monthly Tax Amount Annual Tax Amount
Vehicle purchase $3,025.00
Vehicle insurance (50% of ICBC cost) $100.00 $1,200.00
Vehicle fuel $81.25 $975.00
Home heating $16.65 $199.80
Misc $100.00 $1,200.00
Total $297.90 $6,599.80

 

This is just a snapshot of Henry’s household consumption expenses, and doesn’t look the biggest part of his tax burden: income tax. It also doesn’t take into consideration property taxes. Even so, the Child Benefit of $1,850 he receives only offsets a bit more than a quarter of the consumption taxes he’s paid during the year. Sure, “ever dollar counts,” as the campaign tells us, but Henry’s balance sheet with the feds is still not looking very good.

Case Study #2: Shazeal and the GST Credit

What about Shazeal? The young lady who moved to a new town to go to university, and a windfall of up to…(wait for it)…$425 for her GST credit. Now, she wouldn’t have paid GST on what are likely, her two biggest expenses: tuition and rent. But what about everything else? Food, utilities, mobile phone, transportation, clothing, entertainment, maybe a flight home to see her family–let’s ballpark it at $10,000. If GST was payable on 85% of these costs, the GST credit of $425 would exactly cover her expenses.

But that isn’t the whole story. Let’s put aside for a moment the other taxes on purchases, like PST, that Shazeal would have paid, and look at her two biggest expenses: rent and tuition.

If she’s going to university in BC, she’s probably in the lower mainland, south island, or maybe the Okanagan, the parts of the province with the highest cost of living. Let’s assume she’s not living in student housing and is renting off campus. Sharing with a roomate, she could reasonably be paying $1,000 a month. Though she doesn’t see it, her landlord is passing on a share of his tax burdens to her. Let’s say she’s renting a basement suite in a house in Vancouver worth $2 million. The City’s mill rate is $2.47 per $1,000 of home, which is nearly $5,000 for the year. If the basement is a third of the house, and the landlord passes on that proportion of the property tax to his tenants, then Shazeal’s share is $70 a month. If the landlord had recently bought the property he might still be trying to recuperate the $38,000 in BC property transfer tax he would have paid.

But the much more significant contributor to Shazeal’s high rent cost is municipal zoning regulations. Unfortunately, the costs of these are nearly impossible to estimate, so let me just pose some hypotheticals: How much greater would the supply of basement suites be in Vancouver if there were no permits required for them? What effect would this greater supply have on rents? What would the effect on rents be if apartments were not prohibited by zoning by-laws in 85% of the city? How much lower would the cost of housing be if the city’s development and building permit processes took months or weeks instead of years? Because virtually all North American cities have such regulations (though some are better than others, and Houston, TX is a notable exception) it’s hard even to ballpark how much cheaper rents would be without them, but conservatively we could say 25%.

Shazeal’s other big expense is tuition. Let’s assume she’s taking a full undergraduate course load in the arts at UBC. That would mean $5,400 if she just attends Sep-Apr. Add to that $543 per year in mandatory levies and possibly several hundred more in levies that she can opt out of , like health insurance. The amount that Shazeal pays represents about 40% of the cost of her tuition, with rest paid by taxpayers. Over the course of her academic career, this represents a subsidy of tens, possibly even hundreds of thousands of dollars.

But let’s say that Shazeal isn’t interested in becoming a professor, and just wants a BA so that she can appear respectable to her friends and family back home, and be qualified for an entry-level office job. In order to figure out Shazeal’s total outlay for her 4 year degree (direct education costs only), we need to add in those notoriously overpriced textbooks, at about $400 per term. Tuition plus fees plus books equals $6,743 per year, so $26,972 for 4 years. When we consider Shazeal’s living and other expenses during this period, and the income she could have made if she went straight into the workforce, we’re up to 6 figures very quickly. It’s no small investment on her part, even if the taxpayer is picking up the lion’s share of the tab.

Though the $425 GST credit she gets offsets the GST she paid out, in the grand scheme of things she’s in a difficult financial situation thanks to the high cost of education and housing.

Case Study #3: David and Working Income Tax Benefit

Let’s turn to our third and final My Benefits and Credits case study: David. It seems that David was employed in a certain industry or profession, but lost that employment and had to change careers. While getting established in his new career, he had to make do with low-wage jobs, and was eligible for the Working Income Tax Benefit (WITB). This benefit is available to employed Canadians earning under $30,000 per year. David hints that he may be a single father, and if so he could claim up to $1,903 in WITB. Let’s assume that he earns little enough ($16,000 per year) from work that he gets the full benefit.

Now let’s look at the taxes David pays on his employment income. We’ll say that his $16,000 per year in wages is his only income. On that, he’ll have about $270 in Employment Insurance and $638 in Canadian Pension Plan contributions. Assuming he has no other deductions he can claim, he’ll pay 5.06% provincial income tax on $5,318 of his income, which equals $269. He’ll also pay 15% federal tax on $3,931 of his income, which equals $590. For the reasons I mentioned above, we’ll consider CPP and EI taxes. In total, that makes $1,767, so with his WITB of $1,903, it looks like David has just barely made it out ahead!

Let’s not get too excited for David though. This exercise only considered his tax on income. Like Shazeal and Henry, there will be taxes and government burdens on the costs of everything he buys. And unless he has a friend a relative to help provide him shelter, transportation, or cover some of these costs, David and his daughter will likely be destitute on such a low income. His monthly net income of $1,344 will barely get him a roof over his head, and of course there are other necessities to cover beyond that.

You win some, you lose most

To sum up, in 2 out of the 3 cases presented, the government benefits didn’t come close to offsetting the taxes and other government-imposed costs. In the third case, the individual barely broke even. These were my rough calculations and don’t capture the whole financial picture of these individuals. They each would have paid more taxes, but in fairness, also received more benefits (health care, education for their kids, public roads, etc). Doing a full accounting is virtually impossible, because we can’t estimate what some goods and services would cost in the absence of government monopolies and regulations.

I hope this exercise gives some sense of how there’s a spectrum of government imposed costs: from direct taxes (like income tax), to less direct ones like PST, to hidden taxes like the Employer Health Tax (which will drive up the cost of everything, from fitness membership to municipal taxes), and finally to those other unavoidable costs which can’t properly be called taxes but amount to the same thing (e.g. EI contributions, ICBC premiums). If British Columbians knew how much of their earnings they were actually paying to all levels of government, they might demand a tax cut, or at least better services.

What One Person Can Do

Originally published by the West Coast Libertarian Foundation  in the newsletter of the Greater Vancouver Libertarian Association in April 1981.

On March 21 Peterborough Libertarian activist Sally Hayes addressed the second meeting of the Libertarian Supper Club of Vancouver. Twenty-six guests listened to Mrs. Hayes’ discussion of the role of the individual in libertarian activism. She pointed out that one person can in fact have considerable influence on political events.

She mentioned her personal indignation at Senator Edward Kennedy’s proposal of a Medicare program for the US and the way he cited Canada as an example of how Medicare has worked successfully. Ever since the introduction of Medicare in Ontario, Sally has been keeping a file of newspaper clippings on its effects on the state of health care in the province.

She noted that over 90% of the population had private insurance before the introduction of Medicare. The post-Medicare situation resulted in bureaucratic tangles, an exodus of doctors from the province, and a deterioration in the quality of medical care. The Ontario Health Insurance Program (OHIP) created so much dissatisfaction among Ontario doctors that a considerable number have opted out of the program.

To counter Kennedy’s allegations she wrote a letter to the editor of every major newspaper in the US refuting the claims of the Senator using her collected documentation.Many newspapers published her letter and the Colorado Medical Association reprinted her letter in a brochure entitled “The Truth from Canada”, copies of which were placed in the waiting rooms of most doctors’ offices in the state.

This brochure was published shortly before a visit by Senator Kennedy to Colorado to promote his plans. Needless. to say, he was not well-received.

She also related how her husband, John Hayes, addressed a Peterborough city council meeting and persuaded the council to refuse to subsidize a local artist to the tune of $5000. He threatened to withhold his business taxes if such a grant was made.

Perhaps the best example of effective action by an individual was Mrs. Hayes’ battles with the Metric Commissars. Peterborough was one of the three test centers for metrication several years ago. The local reaction to forced metrication was unfavorable and she took the time to document the expenses involved in the program and to launch an effective movement to stop compulsory metrication.

Operation HUMBUG (Help Undo Metrication -Bug your MP) was instrumental in convincing Peterborough MP Bill Domm and former Minster of Small Business Ron Huntington to become outspoken critics of the program.

Metrication has effectively been delayed two years as a result of HUMBUG’s efforts. 1982 is now slated as a target date for metrication in 37 cities across Canada. But Sally Hayes has not quit yet.  Her organization continues to grow and will not cease until compulsory metrication is stopped and the Metric Commission abolished.

Her talk inspired her listeners to realize that speaking out on issues is not merely crying in the wilderness. Sally Hayes is an excellent example of what one person can do.

Leader’s Report, January 2019

by Don Wilson, Party Leader

Wow, I can’t believe January is already over! It feels like just yesterday that we were all overstuffing ourselves and cramming in endless Christmas parties!

It’s been quite the January, both for me and for the Party!

First up, and most importantly to me (sorry guys) I became a father for the first time on January 18, 2019. Little Natalia is a total delight. She and Julia are doing marvelously together. I get to hold Natalia from time to time, but she definitely prefers mom.

Ok, back to the gritty world of politics!

Bill Walker for MLA in Nanaimo!

On January 2nd Premier Horgan (finally) announced the Nanaimo by-election to be held January 30, 2019 (that’s this Wednesday, Nanaimo members!). Because of the incredibly short election period (thanks John) candidates only had less than 7 days, until 1pm on January 9 to get their nomination papers in.

Enter our excellent candidate, Bill Walker!

For those of you who haven’t gone through the process before, this requires the candidate to obtain 75 signatures from riding residents, pay a registration fee by bank draft, submit signed documents from the party leader and treasurer, as well as the completed nomination package.

Needless to say this is an insane thing to accomplish in a week. Thankfully – we didn’t have to!

Thanks largely to the foresight and perseverance of our Candidate Readiness Officer, Kyle Geronazzo, who keenly anticipated the timing of the election, Bill’s potential candidacy was brought before the executive and approved well in advance, which got Bill a healthy head start to work on his signatures and get the necessary documents together.

Damn, I love seeing everybody work together so well!

Bill Walker deserves a huge amount of credit here. He is giving so much of his time for no monetary reward, and putting his name and face out there in his own community to speak up and stand for individual freedom and smaller government. We all know how much flak we can get in a world of statists when we are trying to defend free market principles and explain how the state operates by coercion. But Bill isn’t just standing up tall – he’s also kind of killing it.

In the short 2 weeks since being confirmed by Elections BC, Bill has had a yellow-vest rally, campaign kick-off event, not less than 4 media interviews, including with Nanaimo News Bulletin, Times Colonist, and Politicoast. Through his professionalism Bill earned invitations to the all-candidates debate as well, where he performed exceptionally well.

I am so honoured to the leader of this party knowing men like Bill stand with me and are working so well to push the ball down the field.

Of course, it isn’t only Bill. When I was going up to help run Bill’s campaign kick-off rally, I was joined by no less than 7 other volunteers! In fact, we had so many people step forward we had to rent a car big enough for us all!

Special thanks to Paul Matthews, Bill Morrison, Kyle McCormack, Paul Geddes, Liam McCoy, Katherine Wilson, and our former Instagram Coordinator (who wishes to remain private!) for joining me on what was a terrific event for the party!

Election day is January 30, 2019, so you better get out to vote if you are in Nanaimo!

Constituency Associations

This month the executive approved our first 2 constituency associations! Congratulations to the members of the “Okanagan” CA and “Kelowna/North Interior” CA! And a special thanks to the members who volunteered to stand as executives!

We also had the founding of two more CA’s: “Surrey-Delta-Langley”, and Vancouver’s “YVR”! The executive will be looking to approve the by-laws at next month’s meeting! Members in those regions please contact RCC@libertarian.bc.ca to be put in touch with your local CA executive!

Support your local CAs!

Changes on the Executive Council

We had two volunteers step down in January, Vice President Lee Smith and Regional Caucus Chair Kenneth Van Dewark. We are all so thankful for their significant contributions to this party in time, money and ideas. We will work hard to honour what you they done.

Our President, Paul Matthews, will be sending a communication out to you all in the coming weeks on the process we need to follow to replace the outgoing executives.

Easy ways you can help bigly

It’s been a great start to 2019, a year that stands to bring the BC Libertarian Party to a whole new level of prominence and relevance. I can tell you people are starting to talk and think about us on a whole new level.

But all of that is only possible by the support that you all give to the party on a daily, weekly, or monthly basis. I just want to take a few quick minutes to point out some simple things you can do to help us keep pushing these ideas higher and higher:

#1) Start a monthly subscription-style donation

So now that Patreon is an enemy of free speech, why don’t you transfer your monthly donations over to us! We have our website set up now so we can accept amounts as low as $1 or $2 per month. Honestly anything you can afford really adds up and really helps us take care of business.

#2) Follow us on Social Media

We now have pretty cool accounts on Facebook, Instagram and Twitter, please follow us!

https://www.facebook.com/BC.Libertarian.Party/
Instagram: BCLibertarians
Twitter: @BC_Libertarians

And if you want to keep up with me a bit more often, please follow me on Facebook or Subscribe to my channel on YouTube!

FB: https://www.facebook.com/dnswilsonLBN/
Youtube: MrDNSWilson

Until Next time!

Don (N.S.) Wilson, Sunday, January 27, 2019

What’s Wrong with the CleanBC Plan

by Clayton Welwood, 2017 candidate for North Vancouver-Seymour

From a political point of view, there’s much to dislike about carbon taxes. But from an economic point of view, the idea behind a carbon tax isn’t a bad one: the potential harms caused by greenhouse gas emissions are delayed, dispersed and difficult to determine, but still likely real, so a putting a price on these emissions will incentivize producers to reduce them, and motivate consumers to seek lower or zero emission alternatives.

For such a scheme to be effective in combating climate change, it would need to meet a number of criteria:

  1. result in a high enough “price” on carbon to significantly change patterns of energy production and consumption
  2. provide a framework where real innovation is possible and potentially profitable
  3. not make people poorer

I’ll address each of these criteria separately, explain why they’re necessary, and show why the provincial government’s new CleanBC Plan doesn’t do a good job of meeting them.

Let’s first acknowledge that for any GHG emission plan to have an effect on the climate, there needs to be similar efforts across the globe. British Columbia only produces a fraction of 1% of the world’s GHG emissions, and so from a practical point of view what we do here may not matter much, even though from a moral point of view, it’s important that we try to do our part to avert serious environmental harms. So, for this thought experiment, let’s assume other jurisdictions are also pulling their weight.

Let me also state that I believe there is a moral case for a carbon tax that some libertarians could accept. The standard libertarian view is that harms from pollution should be settled in the courts, e.g. if you can prove that my factory’s smoke caused your lung disease, I’ll have to pay you compensation. The thing with CO2 and some other greenhouse gasses is that they aren’t pollutants in this sense, and it’s a long chain of causation dispersed across time and space before anyone is harmed. It’s possible that private actors on their own will come up with solutions that reduce GHG emissions enough to avoid severe warming, or that mitigate its impacts so that few people are harmed. But given that the earth may hit a point of no return in the next couple decades where rapid global warming becomes irreversible, it may be prudent for governments to set a framework that fosters this innovation. If governments can do this in a way that on net, doesn’t make citizens significantly poorer or less free, then imposing such a carbon tax is probably better than doing nothing. And yes, taxes are extortion; but at least with taxes on the sale of particular goods, you can forego the purchase of those goods (assuming there’s an alternative, which is exactly the point of a carbon tax).

Getting the Price Right

The BC government’s goal with the CleanBC plan is to reduce GHG emissions to 40% below 2007 levels by 2030, and 80% below by 2050, which seems to be in line with the level of cuts the Intergovernmental Panel on Climate Change is recommending. The CleanBC plan states that the carbon tax will contribute 1.8 Megatonnes in GHG reductions towards BC’s 2030 target. This represents about 10% of the total, with the rest of the reductions coming from regulatory measures, such as mandating that all new vehicles sold in BC be zero-emission.

BC’s carbon tax is currently $35 per tonne, going up $5 a year until it reaches $50/tonne in 2021. That works out 7.8 cents per litre of gasoline and 6.6 cents per cubic meter of natural gas at current rates. The demand for gasoline is relatively inelastic, and this carbon tax cost (one of many taxes on gasoline) on its own is not enough to make many consumers look for alternatives. Even with government rebates, the cost of purchasing an electric vehicle is out of reach for most families in BC, and even many urbanites aren’t willing to make the sacrifice in convenience that comes with alternate modes of transportation such cycling or public transit. A carbon tax at this level may however encourage some people to choose more fuel-efficient cars or make fewer trips by car.

To really change people’s transportation habits would require a much higher carbon tax. If it were 10 times higher, say 78 cents per litre on gasoline, it would make driving much less attractive. Likewise, if natural gas were 66 cents/m3, many consumers would switch to electric appliances and heaters.

But this would result in massive costs. Just think about what would be involved in removing natural gas fired boilers in every building and replacing them with electric space and hot water heaters. Even if electricity prices didn’t increase, such an outlay for new equipment would make everyone significantly less well-off, which conflicts with requirement #3 above.

Making Real Innovation Possible

Again, we have to assume that the rest of the world is on a similar path, and that they’re developing low-carbon technologies that we can adopt here in BC. However, some local innovation is also required, even if only in the form of process innovations that allow local organizations and communities to run more efficiently.

Take public transit, for example. While the Skytrain is good for those that have access to it, bus service in many parts of BC, and even greater Vancouver is very infrequent and slow compared to a trip in a private automobile. Private alternatives to public transit, such as carpooling, ride-hailing services like Uber, or privately-run mini-bus services would be much more attractive to consumers if a high carbon tax were in place. The resultant demand for such services could be enough to push the government to deregulate the transportation sector to allow such private for-profit operators.

The problem with the CleanBC plan is that it combines a carbon tax with specific regulations on how emissions reductions targets are to be achieved in each sector. A few examples: the step building code lays out the details on how buildings are to be constructed to reduce heating requirements; a mandate for 15% of natural gas used to be renewable; a requirement that by 2040 all new cars and light-duty trucks sold be zero-emission.

What if these measures conflict with other social goals, such as making life more affordable for regular British Columbians (which is supposed to be the center-piece of the NDP’s policy agenda)? For example, the step code will raise the cost of housing when British Columbians already pay 31% of their income towards shelter (more than any other province), and the required renewable component will complicate supply-chain logistics for natural gas providers, increasing the cost for consumers.

And what if these aren’t the best steps to get us to a low-carbon future? What if greater reductions in emissions can be achieved at a lower cost by converting vehicles to run on natural gas instead of gasoline? What if the money spent on expensive building retrofits could go further if spent on public transit? What if the best bang for our buck can be achieved by developing technologies that can pull carbon out of the atmosphere?

No one knows for certain what the best approach to fighting climate change is, but history has shown us that when the price of one good becomes too high, markets are able to generate alternatives. The freer the market, the faster the alternatives appear and are adopted. The CleanBC regulations limit the scope for innovation that a high price on carbon is supposed to foster.

Not Making People Poorer

Many of the proposals favoured by governments to deal with climate change involve making fossil fuels more expensive, pushing consumers to switch to other sources of energy. But if the green energy sector hasn’t developed renewable alternatives enough to provide energy at equivalent prices, instruments like heavy carbon taxes or bans on coal-fired power plants can condemn people to energy poverty. This is exactly what happened in Ontario, where due to such policies by the previous government, energy prices rose 71% over a decade, forcing families of limited means to choose between heating and eating. Such policies are broadly unpopular, and were a major factor in voters deciding to remove Kathleen Wynn’s Liberal government in favour of Doug Ford’s Conservatives.

Such policies are not only politically difficult, they also represent a step backward in the larger trend towards a wealthier populace and a cleaner environment. The Environmental Kuznets Curve describes the relationship between per capita income and a clean environment, hypothesizing that once a society reaches the level of economic development where the majority of people’s basic needs are met, further growth leads to less pollution and better environmental stewarship.

But if necessities like home heating and transportation suddenly become a lot more expensive due to government carbon policies, this could cause people to de-prioritize environmental issues and make them suspect of future environmental reforms that come in the form of taxes, bans and restrictions. If the goal is to eliminate the use of fossil fuels over the course of a generation or two, such approaches may be counter-productive if they provoke too much public resentment. The yellow vest protests in France, which have lasted for two months and are the country’s largest since the 1968 uprising, indicate that this may have already happened. Carbon taxes are the issue that sparked the protests, which spread from Paris to the rest of France and have been picked up in various places around the world.

The gold standard for a carbon tax is a revenue neutral one; in other words, one where the increased tax on fuel is offset by other tax reductions, meaning people aren’t on net any worse off. BC was the first province in Canada to implement a carbon tax, and as promised, for the first few years after its introduction in 2008, it was revenue neutral, with the offset coming in the form of reduced income tax. This doesn’t mean that no one was made poorer by it. It’s pretty easy to imagine someone who pays little income tax (let’s say a start-up entrepreneur who hasn’t yet turned a profit, but still requires a significant amount of fuel to run her business) who would be paying much more in carbon taxes than she gets in income tax reductions. Still, the economic damage of the early-years BC carbon tax was kept to a minimum, which is more than we can say for most taxes.

BC’s carbon tax hasn’t been revenue neutral for years though, and the current NDP-Green government has no intention of making it so, even if they are offering a Climate Action Tax Credit of $135 per year to low income British Columbians. But if you’re making over $50k per year, you won’t be eligible for that, so the current carbon tax makes most British Columbians on net worse off.

Carbon Taxes: Nice in theory, poor in practice

BC is estimated to take in $865 million in the current fiscal year from the carbon tax. As Kenneth P. Green from the Fraser Institutes argues, it would take only a 2% cut in provincial spending to achieve $865M in savings, which could be returned to taxpayers to make the tax revenue neutral again. As the price on carbon rises, the BC government expects revenue to grow by 16.5% per year for the next 3 years, making it a more vital source of revenue, and the possibility of it becoming revenue-neutral again more distant.

Because political opportunism nearly always trumps good science and good economics, the carbon tax is for me, a dead-end in dealing with climate change. Notice how now that the feds are forcing a carbon tax on the entire country, none of the other provinces are seriously considering making their carbon taxes revenue neutral, now that BC has given up on the idea. If Libertarians held the balance of power in the legislature, or even had a vocal MLA there, there would be hope revenue neutrality could be restored. The BC Libertarian Party’s approach to taxes and spending goes further than that; we want to triple the basic exemption for income tax, which would put British Columbians in a much better position to absorb the costs of transitioning to a low carbon economy.

First, do no harm (with subsidies)

When libertarians look at any problem, one of the first things we ask is “how is government aggravating it?” Politicians and bureaucrats are very quick to blow their own horn on all the things they’re doing to fight climate change (however ineffectual) but not so quick to mention the things they do that keep a fossil fuel economy entrenched.

While BC doesn’t directly subsidize its oil and gas industry, the province does offer several royalty credit programs that can offset the costs of drilling new wells or building infrastructure. There’s a sensible logic to this: government coffers will be better off in the long run the more such royalty and tax-paying operations start producing. These programs may have been a good idea when they were introduced a decade or so ago, when gas prices were high, but with the massive increase in shale gas drilling in the US in recent years, the price of natural gas is lower and looks to remain so indefinitely. The price of oil has fared even worse, especially over the past year.

If the government’s goal is to increase tax and royalty revenue, the main problem isn’t the amount of resources being pulled out of the ground, it’s the fact that they sell for so little due to inability to reach markets in other parts of the country or overseas. A much better approach for the provincial government to take would be to streamline the complicated approval and regulatory regimes that seem to be preventing pipelines from being built, and publicize these efforts to restore some level of investor confidence in BC’s oil and gas sector. A healthier investment climate would make it easy for the province to scale back or get rid of royalty credit programs, and allowing these resources to be shipped by pipeline instead of train would also reduce the amount of fossil fuels burned in transportation.

Second, stop keeping highways artificially cheap

Transportation represents the second largest source of GHG emissions in BC, after industrial activities. BC’s highways are paid for in part by a fuel tax of 14.5 cents per litre on gasoline and other motor fuels (25.5 cents in Vancouver and 20 cents in Victoria, as there are additional levies for public transit). If the goal is to fund the highways through a tax that motorists have a hard time avoiding, then the fuel tax does its job, but it does a poor job of making those who use the provincial highways the most pay for them. In effect, those who drive mostly on city streets paid for by their municipal taxes are subsidizing drivers who use the highways all the time.

The other problem is that without some kind of fees for use of the highways, the sections that bring commuters in and out of major city centers get backed up on a regular basis. The rush hour traffic on highway #1 going in and out of Vancouver is truly awful, not only resulting in hundreds of wasted hours per year for each commuter, but also no small amount of unnecessary GHG emissions. Instead of trying to develop some kind of rational pricing scheme, the province has gone the other way, getting rid of the tolls on the Coquihalla and the Port Mann.

Replacing the fuel tax with a system of modest tolls on the highways would allow commuters to make more rational decisions on how they get around. It would make carpooling and public transit more attractive, and result in fewer emissions from idling vehicles. Speaking of carpooling, in the absence of any data to show that HOV lanes have been of any use in encouraging it, a better idea may be to go the route Seattle has, and convert them to express toll lanes.

Third, discourage clearcut logging on crown lands

Forestry is regulated in BC through a system of Tree Farm Licences that allow forestry companies to cut timber on crown lands. Environmental regulations apply, but clearcut logging remains the standard practice in the province. Companies are, however, required to replant the areas they cut.

Aside from the oceans, forests are the earth’s largest carbon sinks, storing roughly 100 times as much carbon per acre as fields planted with crops. But if new trees are planted to replace the ones cut down, there’s no net increase in GHG’s, right? Some recent scientific studies cast doubt on that by showing that up to 50% of the carbon stored in mature forests is stored in the soil, and because clearcut logging seriously disturbs the soil, some of this carbon may end up in the atmosphere. Branches, stumps and other wood waste left behind also release CO2 as they rot or are burned. Furthermore, consider the fact that a mature tree adds more wood mass each year than a young tree, meaning that mature forests pull much more carbon out of the atmosphere than young forests.

A different land tenure system for forestry, one that allowed for longer term leases, smaller parcels, or outright private ownership, could likely make selective logging a more viable business strategy. Setting the stumpage rate (royalty for timber cut on crown lands) higher, and removing the heavy government involvement in how timber is priced and sold (i.e. allowing a free market in logs) could also aid the shift from clearcutting to selective logging, which would help BC’s forests become better carbon sinks.

Lastly, reduce business regulation and let innovation flourish

The main problem with the CleanBC plan is that by specifying how GHG’s are to be reduced, the best opportunities for private sector technological solutions to climate change spurred on by a rising price on carbon may be missed. Furthermore, the amount of business regulations (not just environmental regulations), the shortage of land zoned for industrial use, and business taxes (including the new payroll tax to replace MSP) all act to discourage entrepreneurship. As much as the CleanBC plan touts BC as a center for the development of green tech, this industry could be much larger if the provincial government and municipalities had regulatory frameworks, taxes, and land-use policies that were more business-friendly. Instead, the province has opted to keep these barriers to entrepreneurship in place while creating tax credits and subsidies for green projects bureaucrats and politicians know and favour.

What they don’t realize is that the big technological breakthroughs that have a real shot of averting or mitigating climate change probably aren’t on their horizon yet. Whether it’s bio-diesel produced on a massive scale by algae farms, grand forests of synthetic or genetically engineered trees to capture mega-tonnes of CO2, a new method of generating renewable energy that doesn’t require huge capital investments, or some other solution no one has heard of yet, BC could the place where it is developed if the conditions for innovation and investment are right.

But what if whatever BC does, climate change still occurs?

It will, we can bet on that. The climate has been changing since the earth was formed, no reason it’s going to stop now. Human beings will be able to adapt to climate change, as long as we have the resources to do so. It’s important we don’t sacrifice the fundamentals of our prosperity (a free enterprise economic system, rule of law, and a culture that embraces innovation and entrepreneurship) in the battle against climate change. If these fundamentals can be preserved, it’s safe to assume that our children and grandchildren will be wealthier than we are and in a good position to deal with negative effects on the climate.

BC’s ecosystems, however, aren’t getting wealthier generation by generation. Increased human activity, including the logging of old growth forests and the conversion of marine, river and inland habitats to other uses, means that maintaining the health of these ecosystems is already challenged. I believe that the province’s environmental efforts should focus on restoring these local ecosystems rather than fighting a global problem that may well occur no matter what we do. Restoring salmon spawning areas, protecting wetlands from being turned into low-density housing, and starting or expanding breeding programs for threatened species are just some of the initiatives that private sector environmental organizations can take the lead on. But the provincial government can still play an important role in terms of collecting data on ecosystem health and ensuring that resource extraction on public lands is carried out in an environmentally sensitive way. Ultimately though, it would be good to see more of BC’s public lands turned over to First Nations, municipalities, conservation trusts, and private owners, who are in a better position and have better incentives to steward their land, than bureaucrats in Victoria.