Wednesday, July 30, 2008

Vote Grab Alert


One thing about this government, they don't publicly float anything unless pre-approved. With that in mind, what are we to make of these open musings from Conservatives, gathering to try and figure out some actual new policy:
Tories looking for ways to cut gas price

LÉVIS, Que. — The Conservative Party will look over the next two days for ways to bring down the price of gas even though there is no room for major tax cuts, Finance Minister Jim Flaherty said.

Still, Mr. Flaherty said that the Conservative caucus will be exploring solutions to high gas prices at its current two-day meeting, including looking at a variety of tax measures that will be proposed by MPs.

Ottawa rakes in about 4 billion per year from the 10 cent/litre excise tax on gasoline. With a fall election likely, which really means little accountability on any surplus/deficit for this fiscal year, does anyone doubt the Conservatives would consider a token cut on this tax? Even if the government were to lower the tax, say to 8 cents, it would only mean a 800 million less in the coffers, something Flaherty could probably argue is doable. Forget how relatively meaningless this would be to the consumer, it would allow the Conservatives a talking point, heading into an election.

Lowering the excise tax would also allow for a nice contrast with Dion's Green Shift, which simply replaces the tax with a carbon tax, net neutral. Who wants to bet the Conservatives offer some token gas relief, to bolster their electoral prospects?

19 comments:

Blues Clair said...

Wasn't Mr. Kinsella musing about how somebody should campaign on lowering gas prices and everybody saying he was a nut? This could prove tricky for Dion, who isn't noted for his political agility... but i'm no expert.

Steve V said...

Tricky indeed.

Anonymous said...

How can it be a token tax if the excise on gas goes from 10 to 8 permanently?

Will Dion have to do something more radical, possibly cutting the income tax rate on low income earners from 15 to 10 instead of the designated 13?

Mind you a 10 per cent income tax rate would play a much greater effect in eliminating child poverty.

Steve V said...

"How can it be a token tax if the excise on gas goes from 10 to 8 permanently?"

I say token, because 80 cents on a tank of gas won't change anything, but it sure will appeal.

ottlib said...

As long as gasoline stays above a buck a litre a token reduction in the excise tax will not have much of an impact.

Then there is the idea that even talking about reducing the gas tax could serve as an opening to talk about to the fact that Stephen Harper promised to "do something" about gas prices if they exceed $.85 per litre. How do the Conservatives square that circle? "Better late than never?"

Alot of folks have stated that Mr. Harper's fiscal policies have restricted Mr. Dion's ability to fund some of his promises. The same holds true for the government. They have absolutely no fiscal room to maneuver so they cannot give Canadians any good news about gas taxes without giving them bad news about program cuts or deficits.

Now if the Conservatives actually comes out with a plan to regulate gas prices they could be in business. Although the howls of outrage from Alberta would be deafening.

Steve V said...

I think we can agree, they are poised to do something, which I suspect will be superficial, but political.

"Cutting gas taxes" would look good in a brochure"

Anonymous said...

If regulating gas prices what Dion promised after following McTeague's example?

Anonymous said...

Well, its a messy and sort of haphazard way of making economic policy (but why should we surprised by that at this point). But if the conservatives come out with a token reduction to print in a brochure and highlight into some ads, then Dion ought to just say something along the lines of this:

"As I've explained, our Green Shift plan doesn't include gas anyway since it is already taxed. We support dropping the gas tax "x" cents as the Conservatives have suggested as long as independent audits can show it will be accomplished without driving the budget into deficit."

No need to get all twisted in knots over a token ploy, it flatly rejects ol' oily's argument again in a public way, and promptly tosses the ball back into the conservative court for them to justify the strain on the already questionable annual budget.

And, if the conservatives can't or won't confirm that it won't drive the budget into deficit, then just say financial responsibility was the basic starting point and let the election commence.

If the suggested reduction really is token, it would be almost foolish to lose much sleep over it. And it would be equally foolish for the conservatives to get all huffy about it. That might float for a week or two but it wouldn't sustain a campaign - especially when stacked against the argument that a government needs to be financially responsible.

kody said...

Simply promising to not do what Dion is proposing is a political windfall.

Everything else is gravy.

Token or not, every person who has to grimace at the pumps (and when opening their home heating bills - Centra Gas just announced a 7% increase and some are predicting upwards of a 30% rise by next year),

welcomes any attempts to relieve their burden, and will obviously detest steps to increase them.

Which is why Harper is now taunting Dion to bring on an election. Dion's carbon tax proposal was perhaps the greatest political miscalculation of any modern Liberal leader.

ottlib said...

Then there is the fact any token decrease would be eaten by the gas companies within a day.

Really, gas prices go from $1.20 to, let's say, $1.18 and then the very next day back up to $1.21.

Canadians are extremely cynical when it comes to gas taxes and gas prices. The Conservatives will have to come up with something substantial to overcome that.

jarrid said...

Ploy or no ploy, the timing is good for this proposal. Dion's tax proposal could not have come at a worst time. This would have been a tough sell at the best of times - it is not the best of times, what with home heating bills set to put people in the poor house and people curtailing their driving because of the price of gas.

A friend very recently travelled from Ottawa to western Canada and said he's never seen such light traffic on the trans-canada highway.

My prediction is that the Liberals will lose ground in all three ridings and will lose Guelph.

Thereafter there will be open revolt on the part of some of his MP's.

Raphael Alexander said...

They won't be making any cuts to the gas excise tax. They're already in the red right now. Can't be adding to that number, especially with Liberal-style spending habits.

Steve V said...

raphael

He might have that auction money available to balance in the short term, projecting a recovery beyond that to fund it. Very, very easily, could they slip this in and justify it, particularly when the chickens don't roost until after a fall election. I bet we see something, and strictly from a political sense, it's not a bad move. This is the other side of the coin, the Cons get to regroup.

Anonymous said...

Steve,

It must look enticing to Harper and Flaherty. The surficial optics are built for a campaign sound bite.

Although I don't think cutting gas taxes is a good longterm move for the country.

If they are going to go there, I would suggest they make the O&G producers sit down with them and come up with some sort of penny a litre fund for green innovation, or perhaps legislate a national board to oversee fuel prices, so that they leave the perception of oversight on collusion and unreasonable price fixing.

You would certainly expect that O&G producers are much happier with Harper at 24 Sussex than Dion. That being the case, they may be willing to bend on these sorts of things.

Tomm

Steve V said...

Tomm

Well, that's sort of the point of the title, it isn't about good longterm strategy, just immediate political gain. It might be shrewd in a sense, because they don't have much time for serious policy renewal, its the record and whatever they can come up with on the fly. This all assumes a fall election of course, but to date any policy has generally been considered in an immediate sense, and a sympathetic voice might say that's the nature of minority governments.

dalestreet said...

Just wondering if anyone knows if federal subsidies to the oil & natural gas industry have been reduced. Surely with the price of oil being as high as it is, oil sands exploitation must be far more viable/profitable than it used to be.

Steve V said...

Hey dale :) Still there, although I think they're to be phased out.

Tell big brother, welcome to the club when he gets back.

dalestreet said...

Hey Steve

I'll pass on your message.

Just ran across this poll (http://www.angus-reid.com/polls/view/31294/many_canadians_want_to_renegotiate_nafta). I wonder if any of the parties could use this to win votes?

dalestreet said...

Well that didn't work. Let's try again click here.