Thanks to Jeff Cormack of Cedar Valley (‘Air Tax’ flak) for his questions about how low and middle income Ontarians will benefit from a type of carbon tax called ‘carbon fee + dividend’.
We do need higher fossil fuel prices to accelerate the shift away from these climate-warming fuels, or else our children and grandchildren will pay a much higher price for future damage from them, and risk the dangers of runaway global warming.
Here’s how the carbon fee + dividend model works: A predictable, escalating ‘fee’ is added to the cost of fossil fuels by our provincial government, then all of this revenue is pooled and returned in an equal ‘dividend’ to each Ontario taxpayer. Say this total revenue yields a per-taxpayer dividend of $500 per month. Many more low and middle income Ontarians – in fact two-thirds of us – will pay less than $500 for increased fossil fuel prices, hence come out with more in our bank accounts.
Wealthier Ontarians, the biggest users of fossil fuels, will also get the $500 dividend, but will pay more out in higher fuel prices. People who have big cars, travel a lot by jet, warm and cool their large homes with oil or natural gas will pay significantly over $500 per month in fossil fuel price increases, whereas lower income Ontarians – or any citizen who is very careful to reduce his/her fossil fuel use – will pay less than the $500 dividend.
Carbon fee + dividend is a fair and just way to get us moving quickly into our green future – and create far more jobs in the mushrooming clean tech sector than the dirty fossil fuel industries could ever promise or deliver. And it’s a policy that has none of the possible downsides of the cap + trade carbon pricing system that the Wynne government is proposing (although it must be acknowledged that cap + trade is far better than nothing, and can be quite effective if the government gets all the details right.)
Liz Armstrong