27 Sep Subsidizing dirty coal – rebuttal – updated
My old pal Bruce Wark endorses the NDP subsidy for dirty, coal-fired electricity with some knee-jerk left-wing cant contrary-minded views:
You’re forgetting about an important and well-established principle. Governments should not tax necessities. Sales taxes on electricity and home heating fuels fall most heavily on the poorest Nova Scotians and are therefore regressive. Under NDP pressure, the Tories removed the provincial sales taxes on all home heating fuels. But later, they restored the tax on electricity. The NDP is being consistent in removing the provincial portion of the HST on electricity.
Right now, there are thousands of Nova Scotians who are behind on their power bills, not because they wantonly use too much electricity, but because they can’t afford to pay the rates Nova Scotia Power charges. The electric utility has steadfastly opposed variable rates based on family income. The experience in the U.S. shows that income-based rates that lower electricity costs for the poorest do not increase everyone else’s bills. That’s partly because power companies save the administrative costs of chasing so many people for unpaid bills as well as the costs of disconnecting their power.
One other thing. Poor Nova Scotians can’t afford to participate in provincial rebate programs designed to make their homes more energy efficient. Imposing a sales tax on electricity only worsens things for people who are always on the verge of having their power cut off.
A means test to determine power rates? Now there’s a swell idea. Never mind that we already have a refundable HST credit to give low-income Canadians back the HST they pay on necessities.
Wark is quite right that it’s hard for poor Nova Scotians to participate in home energy refit program. The $30M per year Dexter is pissing away spending on a Michael Harris-style election bribe to the middle class promise could have fixed that shortcoming, and produced permanent meaningful reductions in heating costs for the poor, while helping curb Nova Scotia’s scandalously high greenhouse gas emissions.
[UPDATE] Wark responds:
The principle remains. You don’t tax necessities, then ask poor people to apply for rebates. That’s why we don’t tax groceries. How is electricity any different?
In 2007, Utility and Review Board held fairly extensive hearings at the UARB on schemes for variable power rates. The Affordable Energy Coalition presented a number of ideas on how to reduce rates for the poor, while including the poor more effectively in energy conservation programs. [The UARB rejected the proposals.]
I point out again, it’s being done in the States.