Thursday, February 01, 2007

Give A Dog A Bone

Apparently, Canadians aren't putting their green on green vehicles:
TORONTO — The notion that fretful Canadians concerned about global warming are racing out to buy more environmentally friendly vehicles is overblown, according to a survey of new vehicle buyers by Maritz Research.

When asked point blank, buyers maintain that the environment is important, Maritz's Mr. Travell said, but that concern gets overwhelmed by the other factors.

He pointed out, however, that hybrid vehicles, which combine the traditional internal combustion engine with battery power, are coming down in price, although they haven't reached the levels yet of non-hybrids.

If consumers had a choice of a traditional sedan or a hybrid model that is the same in all other ways, they would probably choose the hybrid, he said.

Why isn't the government offering incentives to close the gap between a hybrid and a standard vehicle?

I recently looked into buying a Honda hybrid. The price difference between a regular four-cylinder and the hybrid was around six thousand dollars. I worked out the gas savings, based on the specifications and found I would take a financial hit. It then comes down to the bottomline, and you weigh the factors. In a few months, I will have two children in childcare, which translates into thirteen thousand a year (only ten thousand, six hundred after the generous help from my government), currently we live on one income, plus maternity leave. I just signed both children up to an education fund, recently purchased life insurance so my family has security, blah, blah, blah. In other words, the balance sheet is tight, although I feel some responsibility. I'm sure I'm not alone in the balancing act.

Why doesn't the government step in, reduce the GST on hybrid vehicles and make the purchase somewhat attractive? Bump the overall GST back to 7%, and reduce it for environmental purchases, which would translate into a revenue neutral system (Iggy had it right!). If it comes down to a few hundred, I will make the sacrifice, but anything more just doesn't make sense right now. People don't have the luxury in many instances, we require certain incentives. Throw a dog a bone, this is one example where you can affect change.


Anonymous said...


Our governments don't even need to set-up incentives. All they need to do is change legislation/regulation to mandate that by such-and-such a date, all cars (or all cars in this size class) must be hybrids. They did it for unleaded fuel and daytime running lights.

It the same for home construction. Change the building code to mandate that all new homes must have an R?? insultation rating and solar panels and rooftop wind turbines.

If industry is forced to produce and use more energy-saving technologies, then the price per unit for those technologies will come down and more people will be able to afford to buy them.

Scotian said...

Your suggestions in this post are what I would term "no-brainers", basic good common sense approaches, which is why government hasn't done it yet...*sigh*

I wish the preceding was meant purely in humour but alas there is a lot of truth to it in my experience. :(

Olaf said...

Atta boy Steve,

I knew you had it in you. Great post.

Canadian Tar Heel said...

Steve, it's not nice to point out "common sense" short comings re the environment: government incentives (carrot) and regulation (stick) to close the gap. But what I'd like to know is why the car industry can't/won't meet the demand. There are the usual oil conspiracies, but at the end of the day, it seems like good business, not to mention in the shareholders' interest, to meet shifts in demand.

G&M had an advantage on the market in the 90s, but failed to see the potential and eventually lost its market share by killing its battery programs. And Ford just doesn't get it, period. Both companies are having serious, if not record breaking losses.

Capitalists are and should be asking the same questions you are. The irony of the situation is why aren't the Torries?

Steve V said...

I've always loved the expression, "common sense isn't very common".

Anonymous said...

What is it about Exxon's 40 billion 2006 annual profit that you don't understand? :-)

Steve V said...


I think they said that is more than the GNP of over half the world's countries. It's just obscene.