This does indeed seem like a very risky program. Also, the details are not drawn out. Although the scheme is revenue neutral the question is how the carbon tax load distributes costs and the tax refunds benefits. The Swedish experience with carbon taxes is not all that encouraging in spite of what demagogues such as Suzuki may say. The NDP is not in favor of the tax. I can't find a detailed NDP critique. If someone has a reference please post it in comments. The general NDP view that polluters should pay seems reasonable although the polluters will always claim that they need to pollute to be competitive!
Anyway the Liberals are not in power so the whole proposal is just something to show the Liberals are not enitirely bereft of ideas even though they have no power.
Dion exudes confidence on green plan TheStar.com - Canada - Dion exudes confidence on green plan
ADRIAN WYLD/THE CANADIAN PRESS
Stéphane Dion says Canadians are often "ahead of their politicians in knowing what needs to be done to move this country forward."
Liberal leader thinks Canadians are ready for carbon tax, but some in his caucus are worried
May 18, 2008 Les WhittingtonOttawa Bureau
OTTAWA–Over the summer, Liberal Leader Stéphane Dion will be criss-crossing the country, telling Canadians already reeling from higher gas prices that they need to pay a lot more for the rest of their energy sources. His message, in essence, is that it's time for Canadians to put their money where their mouths are if they are serious about saving the planet.
No one thinks it will be an easy sell, but Dion seems determined, even eager, to take on the task. In fact, he's staking the Liberals' chances in the next election – not to mention his own political future – on this risky strategy.
"I am convinced that far too many political elites underestimate Canadians," he explains. "When you speak to the minds and big hearts of our great people, good policies translate into good politics.
"In fact, time and time again, Canadians have been ahead of their politicians in knowing what needs to be done to move this country forward."
So, despite warnings of political calamity from within his own Liberal caucus, Dion is proposing a carbon tax that will mean new federal levies on energy from all fossil fuels.
Generating perhaps $12 billion a year in extra revenue for Ottawa, it would mean much higher costs for homeowners who heat with natural gas, heating oil or electricity from coal-fired plants. (The price of gasoline, already subject to a federal excise tax, would not rise with the proposed levy, Liberals maintain.)
The attractive side of Dion's scheme calls for this tax windfall to be revenue neutral, meaning the extra taxes would all be returned to Canadians in the form of lower personal and corporate income taxes. As well, the tax code would be tweaked to help low-income earners, Liberals say.
Can Dion convince Canadians to buy into this crusade?
While concerns about global warming are high, asking voters to open their wallets is never easy. Dion is embarking on this quest at a time with near-recessionary conditions in Ontario and Quebec.
"Whenever Canadians see a big-dollar ticket beside a promise, they get very nervous," says pollster Nik Nanos.
The second problem is the economic environment, Nanos said, noting that what Dion wants is to change people's behaviour, but that's a tough sell when people are feeling nervous about the economy.
Call it brave or call it foolhardy, but Dion seems undeterred by these challenges.
In a speech in Toronto on Thursday, he compared this quest to his effort as a Liberal minister in 1999 to set rules for any Quebec referendum question under the Clarity Act. It was done in the face of widespread warnings that he was courting disaster. But in the end, it was seen as damping the fires of independence among Quebecers.
"When under Jean Chrétien, I brought clarity to the unity debate and fought for Canada's unity, remember how many people said: `Don't do it, it's too risky, people won't understand it.'
"I knew that Canadians, including my fellow Quebecers, wanted clarity instead of confusion. . . . I knew people would understand what we were going to achieve together."
It was the same story two years ago, when the uncharismatic former professor and relative newcomer to the Liberal party launched his leadership bid. Few gave him much chance. Eight months later, he walked out of a divided convention as the winner.
While asking Canadians almost overnight to make sacrifices to tackle global warming will be difficult, Dion insists the country is ready to take on this burden.
Experts across the political spectrum, he notes, are speaking out in favour of an environmental tax shift of the kind he is proposing.
Dion sees it as a way to tackle global warming by upping the price of fossil fuels; invigorate the economy by giving individuals and business more tax breaks; and address poverty by expanding government support for low-income families.
But even before all the details of Dion's plan are out, the Conservatives are teeing off on it.
"The leader of the Liberal party wants to propose a carbon tax on the price of gasoline and drive the price of gasoline north of $2.25 and higher," Natural Resources Minister Gary Lunn said. "That is going to hurt hardworking people who are trying to get to work."
Liberals are understandably nervous.
"We have to make it clear to the public right off the bat that it's not going to drive up the cost of living, particularly for lower-income people," says Liberal MP Keith Martin (Esquimalt-Juan de Fuca). "Obviously, the big issue is going to be selling it so people don't think it's just a big new tax."
"You're damn right it's a huge political risk," says a Liberal MP who asked for anonymity. "But as you know, Stéphane Dion is not one to be shy about taking political risks."
And it may still be Dion's best election card. "If you run a peek-a-boo campaign," the Liberal continued, "Stéphane will get killed. His greatest strength is leading with bold, visionary ideas."