Question about Climate Action Incentive payment

[Susan James]

Dear all,

Your opinion please. We don't want to keep the Climate Action Incentive payment; which environment organizations do you think do the most to combat pollution in Canada/Ontario?

Thanks, Susan

[Minister BloordaleUnited]

Susan, I'm not sure what we're being asked to give an opinion on, I'm afraid, as I see no information either attached or imbedded in the note which would give me the context, ie. what is the Climate Action Incentive payment?

Brian

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[John Stephenson]

The Climate Action Incentive payment is a quarterly return to citizens of revenue collected from carbon taxes - e.g. checking my on-line banking I see that I received $139.75 on October 14, and $279.50 on July 14 ,, that was for Q1 and 2  (notice it was twice what I got Oct 14 for Q3), .. not sure exactly when Q4 will come, possibly around Jan 14th  but it should be another $139.75 .. unfortunately it is identified only as EFT Credit Canada  (EFT = electronic funds transfer, just as my OAS and CPP payments are labelled) so an incredible number of people don't even realize they are getting it . especially if they don;t do their own tax return for whatever reason.

 - this will continue each quarter from now on rising in amount as the carbon price rises - today $50/tonne of CO2 equivalent - each April (start of federal fiscal year 0 from now on through  2030 it will rise $15/tonne through 2030 when it will be $170/tonne, ie.3.4 times 2022 so I expect the quarterly payment to someone like me will be approx $475.15, or apprx $1,900 a year ... that's more than my CPP .. not bad .. it's sort of like a universal guaranteed income .. everyone gets the same amount within each province, but people in carbon heavy provinces like Albert and Saskatechewan get even more because more carbon tax is collected there per capita   

But why Susan James says ' We don't want to keep the Climate Action Incentive payment'  if I understood correctly, that's just insane ... I for one want to keep receiving it

and as for the second question "which environment organizations do you think do the most to combat pollution in Canada/Ontario?"  I'd say Citizens Climate Lobby (CCL), which successfully lobbied to get the carbon tax, which is the single most powerful policy to cut emissions .. and the return of revenue to the people is vital to protect people from consequently rising energy prices ... (full disclosure I am Toronto West Chapter Leader of CCL - an international organization with chapters in about 50 countries, many of which have likewise been successful in lobbying for carbon pricing, e.g. Switzerland - eventually every country will have and needs to have it for the world to reach zero emissions .. not just my opinion .. check out The Case for a Carbon Tax by Shi-Ling Hsu (the Toronto Library has it) .. but notice carefully I didn't say that's all we need ... we also need district heating .. see the website of my other interest .. the Boltzmann Institute bi-ib.ca

cheers

  

To view this discussion on the web visit https://groups.google.com/d/msgid/etobicoke-climate-action/CAKLbbf-AR75ZxDMeOZZbNJUWW2kzRnvVc3t4SVq2OQFJaysg4w%40mail.gmail.com.

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John Stephenson

Director - Boltzmann Institute

2493 Lakeshore Blvd West, Apt 416

Etobicoke, ON

M8V 1C7

647-633-3021

[Minister BloordaleUnited]

John, I understand your answer, but have to respond to the assumption that it seems obvious we want to keep it.  I believe, with Susan, that this is a poor way to do this, as an equal payment to everyone does not acknowledge the unequal need for the support of public dollars that many in the community have.  They've done the same basic payback with chidcare and other programmatic initiatives, and this conservative way of redistributing public income makes individuals feel good at the point of reception, but fails to incentivize individuals to feel good about a carbon tax on corporations and also ignores the gaping chasm between the haves, who don't need the payback, and the have nots, who need a lot more support.  Susan, I, and others who are relatively well off have no need of this payback, which is why she was canvassing opinion about what orgs. or groups she ought to feel good about supporting by giving them the money.

Brian McIntosh

[John Stephenson]

Brian, I misunderstood Susan's email - I thought it was canvassing to see if people wanted the government to stop giving it to everyone, whether they wanted it or not.  Of course, anyone is free to give it to charity if they don't need it.  Indeed, I believe that's at least a partial answer to your comment that this is a poor way to return the carbon tax revenue. Another partial answer is that it saves what I imagine would be a non-trivial administrative cost of trying to sort out who needs it from who doesn't need it. Let that be a personal choice.  No means test. 

I don't think it's a bad thing for people to feel good about curbing their energy consumption so that they get back more in Climate Action Incentive payment than they pay in carbon taxes.  That's why it's called what it is and to no harm that I can see. .   

I didn't follow what you were getting at by connecting the distribution of payments to "not incentivizing individuals to feel good about a carbon tax on corporations'".  There is indeed an issue that CCL have been fighting for years about large emitters not being subject to the full carbon tax, as they should be.  Instead, there is a Part Two of the Act, the so-called Output Based Pricing System, under which they pay only on emissions above an emissions intensity standard, designated separately for each of about 38 industrial processes, including electricity generation.  Some rather naive young economists thought this was a good idea as they claimed it still provided an incentive to reduce emissions while protecting industry from competition from foreign companies in countries without a carbon tax.  Based on having worked in several of these energy intensive industries, my take on it is that it provides next to no incentive for the companies to reduce.  Someone might point to recent announcements in the steel industry, but I am sure they were only anticipating eventually being hit with the full carbon tax - which I believe was sound planning on their part,

The only connection between these two issues that I can see (perhaps you can enlighten me) is that the additional revenue from properly taxing big emitters I think should be also returned to citizens as protection from the price of everything going up if the price of, say, steel (or anything else) goes up.as a result of the carbon tax  But that is not the way that carbon tax is used at present.  In Alberta, they give it back to the industries.  I;m not sure what the other provinces do exactly but they get the money that is collected in their province,  If you were saying indirectly that the carbon tax from big emitters should go back to people to further increase the Climate Action Incentive payments and knowledge of that would strengthen public demands that the big emitters pay the full tax, I would agree with you on that, but that didn't seem to be what you were saying, although maybe it was

Cheers..

[Minister BloordaleUnited]

Thanks for the clarification John!  I think we simply have a very different perspective on the difference between systems of taxation, and I personally object to a per capita payback system of any public tax income due to the enormous gap in who needs the help and how the public dollars that have been collected could be used.

Just to be clear, I absolutely think that large emitters should be subject to the full carbon tax, and even to a larger portion of the total tax than is now the case, as I understand it.  And you're right, in your last sentence, as I think we disagree about this payback from big emitters, which I think shouldn't go back to individuals at all, but should instead be used to do more to deliver various publicly-funded programs that would reduce climate change, including a fund for undertaking retrofits, as just one example.

In general I'm in favour of increasing taxes on those who are well off in order to increase public revenues and enable the delivery of funded programs to address specific problems.  Over the last 40 years the percentage of the overall federal budget derived in revenue from the corporate sector has dropped significantly, while the percentage derived from rich individuals has, again in general, either held steady or dropped, leaving the middle class to pick up the slack and enabling many consecutive governments to claim that there's a debt and/or deficit crisis which they falsely claim is precipitated by public spending rather than the real case of falling revenues from which the rich benefit.

I admit the tax discussion above is a very general one, but I'm very much a progressive tax person, and therefore in principle object to returning money to those who don't need it at the upper end while being regressive regarding the public programs needed to sustain the vulnerable and the planet, at the other end of the spectrum.

We may simply have to agree to disagree, which I have no problem with, as a diversity of perspectives on the climate crisis is needed and should be valued.

All the best!

Brian

[carolchrissy carolchrissy]

Hi everyone,

I have (hopefully) attached the link to the CDN government's info about the Climate Action Incentive Payment. CAIP.

It's basically using the carbon price (or tax) revenue derived from fossil fuels to rebate Canadians quarterly. I was recently on a call with a staff member from Yvan Baker's team and we were discussing this.

It is a good idea to rebate this money back to Canadians. The problem that hasn't been resolved is ... we don't recognize it as the carbon rebate because it just shows up in our bank accounts as "Canada".

Carbon pricing is an effective tool to incentivize the decreased use of fossil fuels. And rebating the funds back to citizens should be a win win. But the government needs to make the labelling clear so everyone knows they are getting this carbon rebate.

Many people will actually receive more money back than they pay out in carbon pricing at the gas pumps. So this becomes an incentive to keep carbon pricing and to keep the rebate while driving down the use of fossil fuels.

Mark Jaccard explains this much more clearly in his book: The Citizen's Guide To Climate Success. Or you can check out the link: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/cai-payment.html

Hope that helps!

Carol

------ Original Message ------
From: jstephe...@gmail.com
To: minister.blo...@gmail.com
Cc: susanje...@gmail.com; etobicoke-cl...@googlegroups.com
Sent: Friday, October 21, 2022 12:30 PM
Subject: Re: [ECA] Question about Climate Action Incentive payment

The Climate Action Incentive payment is a quarterly return to citizens of revenue collected from carbon taxes - e.g. checking my on-line banking I see that I received $139.75 on October 14, and $279.50 on July 14 ,, that was for Q1 and 2 (notice it was twice what I got Oct 14 for Q3), .. not sure exactly when Q4 will come, possibly around Jan 14th but it should be another $139.75 .. unfortunately it is identified only as EFT Credit Canada (EFT = electronic funds transfer, just as my OAS and CPP payments are labelled) so an incredible number of people don't even realize they are getting it . especially if they don;t do their own tax return for whatever reason.

- this will continue each quarter from now on rising in amount as the carbon price rises - today $50/tonne of CO2 equivalent - each April (start of federal fiscal year 0 from now on through 2030 it will rise $15/tonne through 2030 when it will be $170/tonne, ie.3.4 times 2022 so I expect the quarterly payment to someone like me will be approx $475.15, or apprx $1,900 a year ... that's more than my CPP .. not bad .. it's sort of like a universal guaranteed income .. everyone gets the same amount within each province, but people in carbon heavy provinces like Albert and Saskatechewan get even more because more carbon tax is collected there per capita

But why Susan James says ' We don't want to keep the Climate Action Incentive payment' if I understood correctly, that's just insane ... I for one want to keep receiving it

and as for the second question "which environment organizations do you think do the most to combat pollution in Canada/Ontario?" I'd say Citizens Climate Lobby (CCL), which successfully lobbied to get the carbon tax, which is the single most powerful policy to cut emissions .. and the return of revenue to the people is vital to protect people from consequently rising energy prices ... (full disclosure I am Toronto West Chapter Leader of CCL - an international organization with chapters in about 50 countries, many of which have likewise been successful in lobbying for carbon pricing, e.g. Switzerland - eventually every country will have and needs to have it for the world to reach zero emissions .. not just my opinion .. check out The Case for a Carbon Tax by Shi-Ling Hsu (the Toronto Library has it) .. but notice carefully I didn't say that's all we need ... we also need district heating .. see the website of my other interest .. the Boltzmann Institute bi-ib.ca

cheers

On Fri, Oct 21, 2022 at 11:40 AM Minister BloordaleUnited <minister.blo...@gmail.com> wrote:

To view this discussion on the web visit https://groups.google.com/d/msgid/etobicoke-climate-action/CAKLbbf-AR75ZxDMeOZZbNJUWW2kzRnvVc3t4SVq2OQFJaysg4w%40mail.gmail.com.

--

John Stephenson

Director - Boltzmann Institute

2493 Lakeshore Blvd West, Apt 416

Etobicoke, ON

M8V 1C7

647-633-3021

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[John Stephenson]

My apologies to Rev Brian for taking 4 days to acknowledge his excellent review of where we agree and disagree and he had it just about right.  I normally try to respond sooner when I think one is warranted which I think is the case here.  I took the weekend off, which I rarely do, and then leisurely worked through my numerous emails starting at the top, replying to many.

To elaborate on where we agree.  I too am a progressive tax person.  I acknowledge that I am also a very fortunate, privileged person.  When I was working and also collecting an early retirement pension from Hydro I was in the top marginal tax bracket and paid a lot of tax.  That didn't bother me but what did was the fact that an ordinary working consultant engineer could be in the top tax bracket when I know many professionals (e.g. many lawyers I knew) earned several times what I did and were not taxed at a higher marginal rate which I believe they could easily afford.  I have also noticed that after retirement with a much lower income I am still paying quite a bit of tax.  So it has occurred to me that it would be more just if the tax system was more progressive, but with the lowest bracket moved up so that low income earners could earn more before paying any and even when their income increased somewhat they would still be paying less on average.  In fact, I would support a guaranteed annual income (GAI) such that even persons who did not work were not in poverty.  The typical conservative response to that would be it would encourage people not to work, but I don't necessarily believe that is a bad thing. There are other useful things people can do, like raising children, volunteering etc, and there should be a mechanism whereby they could keep more of what they did earn if they worked, especially part-time (i.e. the GAI would not be 100% clawed back based on what they earned).  I have also believed for a long-time that public transit should be free, funded by tolls on the highways coming in, congestion charges for vehicles downtown, higher parking fees, higher gasoline taxes and higher purchase taxes on vehicles both new and used and on parts.  

I suppose where we disagree, based on what has been discussed so far, is narrowly focussed on what to do with the revenue from carbon taxes.  And this has been a controversial subject ever since carbon taxes were first proposed, so we are not the only two to disagree on this.  My preference for distributing it equally to the people is based on cushioning people against the consequent increased costs of everything.  This allows the price to be predictably raised each year to eventually become so high that decision makers would rather abate emissions than pay the tax on them.  And long-lead time projects would be influenced by not just the current price, but the committed future price.  I believe the recent decisions by steel companies in Hamilton and Soo to substitute for coal fired blast furnaces were influenced by anticipation of future carbon prices, possibly even higher than $170/tonne, and even while the full tax does not yet apply to big emitters, because they know that climate hawks like us and CCL are never going to get off the government's back about raising the carbon price further and making the big emitters pay the full tax.  And ironically while we have been constantly banging on about Border Carbon Adjustments to encourage other countries to abate emissions, I suspect the Canadian steel's decision was also influenced in part by the Border Carbon Adjustments to be adopted by the EU.  Some sweet irony when you think about it.

If the revenue does not come back to the people they will be out of pocket because of inflation driven by a combination of the carbon prices themselves and/or the costs of abatement to avoid paying the carbon taxes.   So that's the first point, it needs to go back into the economy at the consumer level.  The next issue is whether it should be distributed evenly or somehow weighted heavily onto low incomes.  I don't have a big problem in principle with the latter, especially when the payments become higher.  But I wonder about its practicality, especially when the payments are not so high - the administrative costs could eat a lot of it up.  There is also a question of equity.  Where do you draw the line?  How and who makes that decision? Does it turn us into a nation of liars?  (which the existing tax system already does to an extent). 

Cheers

[Susan James]

Thanks Brian, John and Carol for your discussion & comments. Just followed your recommendation, John, on the Citizens' Climate Lobby Canada, since the carbon tax approach is their focus. 

As Brian said, we probably shouldn't be getting this back--this rebate "fails to incentivize individuals to feel good about a carbon tax on corporations and also ignores the gaping chasm between the haves, who don't need the payback, and the have nots, who need a lot more support".

So. . .enough said maybe. and I've sent my funds off, in hopes that this may help the cause--reducing pollution.

Thanks again, Susan 

On Fri, Oct 21, 2022 at 2:37 PM Minister BloordaleUnited <minister.blo...@gmail.com> wrote: