I have a lot of sympathy for people who live in jurisdictions with ample natural resources and would like to feel more directly the benefits of development. The oilsands of northern Alberta, indirectly, make it almost impossible to secure a roofer or a plumber in southern Alberta, and the housing boom across the province makes it difficult for first-time buyers to get a toe-hold on the property ladder. Can you blame everyday people for wanting salaries that at least compare to rig workers? Can you blame them for wanting lower taxes and lower user fees? Can you blame them when so many are too young to remember the ravages of rampant inflation?
The problem with lowering taxes, of course, is that a government – especially one in perpetual power like the Progressive Conservatives in Alberta – has to revoke the goodies when the boom goes bust. They do not want to go into deficit by relying on windfalls, and so they prefer the rebate check, a ridiculous bureaucratic hassle akin to trading gift cards for family birthdays. In the same way that I buy a Future Shop card for my folks, who buy an Amazon card for my brother, who buys a Chapters card for me, I pay my money to the government, and they write me a check right back. The so-called “Ralph Bucks” of Ralph Klein’s administration have not translated into “Ed Bucks” for Mr. Stelmach’s administration, the latter group spending to catch up on public works neglected by the former. But Rick Bell questioned this morning in the Calgary Sun what the government will do with natural gas rebates, a subsidy that protects average Albertans from the wild swings of an unregulated commodity on a volatile market.
The demand for energy to make energy threatens the homeowner from Grande Prairie to Raymond with severe price spikes, and the subsidy is applied directly to the bill to blunt those sharp edges. Mr. Bell suggests that, as the $325-million rebate program expires at the end of March 2009, some people will call for a revised plan that gives the rebate only to low-income earners or only to people who retrofit their homes for efficiency. On the latter point, Mr. Bell is right to say that the program offers only an incentive to consume.
If we are going to subsidize, an older idea seems to me to be the most responsible way forward. We could easily structure a program that makes efficient use of energy quite affordable. This should cover folks in small homes – and even people in bigger homes who have decided that turning down the thermostat a few degrees is sound conservation. People who use much more, for whatever reason, still have the opportunity to do so, but they would pay a premium for it.
Imagine if it was practical to allow people who drive small cars to work or people who carpool to get their gasoline at reasonable prices, but people who choose to drive large vehicles or whose recreational demands are immodest had to pay more. While that sound public policy might be possible, and might be something we will have to consider in the future, it would take a massive shift in the way we sell gasoline. We need no massive shift to achieve these aims in natural gas consumption. Everyone, seemingly, young and old, left and right, believes some manner of energy subsidy is here to stay in the heating of our homes. Why not use this mechanism to achieve aims we should all agree to be prudent: whether you think you are saving the planet, or think simply that you are preserving natural resources for the use of your children and grandchildren.
