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Saturday, February 23, 2008

Emissions harm the poor while the rich get tax breaks

Emissions for the poor, tax breaks for the wealthy - comment - Emissions for the poor, tax breaks for the wealthy
February 23, 2008
Albert Koehl

The Harper government is sometimes accused of favouring the rich while ignoring the poor – even cozying up to wealthy oil barons at the expense of regular Canadians.

It would be nice if Harper could say it wasn't so. Unfortunately, there's enough evidence in the climate change file alone to make the case.

Soon after coming to office, the Harper government abruptly eliminated a $500 million program, the Energuide for Low Income Households, designed to help poor families do home retrofits to reduce energy use and greenhouse gas emissions. In stark contrast, the government's last budget effectively assured wealthy oil and gas corporations that all of the federal tax breaks they currently enjoy, amounting to about $1.4 billion each year, would remain in place until at least 2010.

There is no doubt that low-income households (and many middle-income ones for that matter) need help to reduce energy use, not only because energy bills are on the rise. The poorest Canadian households already spend 13 per cent of their income on energy bills, compared to about 4 per cent of income for other households. The inability to pay energy bills is the second leading cause of evictions in cities like Toronto.

The cancelled EnerGuide program would have helped 130,000 low-income households reduce energy bills and achieve potential greenhouse gas reductions of 3.4 tonnes annually per home. Green Communities Canada, a group that delivers energy efficiency programs, estimated that the $500 million government investment would have produced $1 billion in energy savings, retrofit jobs, and other benefits – not to mention the obvious environmental payback.

Although the EnerGuide program was introduced by the previous Liberal government, partisan politics alone cannot explain its elimination. The Harper government also scrapped another conservation program directed at higher income households, but quickly reintroduced it under a different name.

The irony was that the low-income fund was likely to pay the biggest greenhouse gas reduction dividends since poorer families often live in leaky homes and can't afford energy efficiency improvements without outside help.

Oil and gas corporations don't need federal handouts. In 2006, the industry made $31 billion in profits. The price of a barrel of oil today hovers near $100. And while the industry gorges itself on record profits, its out-of-control oil-sands projects disgorge massive amounts of greenhouse gases and also poison the water, land and air.

At first glance, the 2007 federal budget finally seemed to acknowledge the absurdity of spending taxpayer money to promote oil and gas projects and associated greenhouse gas emissions.

The budget actually included the phase-out of the Accelerated Capital Cost Allowance (ACCA), a generous subsidy for oil-sands projects, noting that "this preferential treatment is no longer needed." These words suggested a new direction; the fine print largely confirmed business as usual.

Oil-sands projects that were started before March 2007 would continue to benefit from the ACCA while the slow phase-out for other projects would not even begin until 2011, and stretch to 2015. (By that time, government subsidies that the industry has begun demanding for carbon capture and storage projects might well dwarf current handouts.) The Pembina Institute, an Alberta-based think-tank, calculates that 90 per cent of oil-sands projects currently on the books will therefore receive substantial federal subsidies.

Finance Minister James Flaherty devoted numerous pages of his budget to comforting oil and gas CEOs about the eventual phase-out of the ACCA. In fact, the budget – perhaps borrowing from Depression-era programs – called the phase-out conditions "transitional relief."

If the inequality in the government's treatment of rich polluters and poor households indicates government priorities, then the future is bleak for Canada's most vulnerable because global warming will affect them first, and most dramatically.

Hurricane Katrina made this clear. As the chair of the UN's Intergovernmental Panel on Climate Change recently commented: "It is the poorest of the poor in the world, and this includes poor people even in prosperous societies, who are going to be the worst hit."

Full article continued at: Emissions for poor, tax breaks for wealthy

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