Tru­deau’s cha­llen­ges: Trump, ta­xes and energy

Ca­na­da’s tax and energy ad­van­ta­ges are co­ming to a sud­den end, and we should ex­pect bu­si­nes­ses will mo­ve mo­re in­vest­ment to the U.S.

La Jornada (Canada) - - ENGLISH SECTION -

When Jus­tin Tru­deau shuf­fled his fe­de­ral ca­bi­net last week, it sig­na­lled he’s ta­king the next Uni­ted Sta­tes pre­si­dent se­riously. Fin­ding the right mix of peo­ple to work with Whi­te Hou­se of­fi­cials is im­por­tant. But go­vern­ment po­li­cies al­so mat­ter. Our pri­me mi­nis­ter will need to do mo­re to keep

Ca­na­da com­pe­ti­ti­ve and pro­tect Ca­na­dia­na­dian jobs.

Do­nald Trump is ready to upend U.S. po­licy on everyt­hing from tra­de to de­fen­ce trea­ties to im­mii­gra­tion. But the pre­si­dent-elect’s do­mes­tic pro­pos­sals on ta­xes and energy are Ca­na­da’s grea­ter cha­llenn­ges.

The Trump ad­mi­nis­tra­tion in­tends to mo­ve quickly to cut the bu­si­ness tax ra­te from 35 to 15 5 per cent. Add the four per cent ave­ra­ge cor­po­ra­te ta­xax ap­plied by sta­te and lo­cal go­vern­ments and the neww U.S. tax ra­te could soon ef­fec­ti­vely be a co­ol 19 per cent,nt, about eight points lo­wer than Ca­na­da’s 27 per cent ave­ra­gea­ge when fe­de­ral and pro­vin­cial ra­tes are com­bi­ned.

Our country’s tax ad­van­ta­ge is co­ming to a sud­den end. As a re­sult, we should ex­pect bu­si­nes­ses will l in­vest mo­re in the Uni­ted Sta­tes and less in Ca­na­da, whe­re hig­her costs exist.

This brings us to energy. Tru­deau wants all pro­vin­ces to put a pri­ce on car­bon, di­rectly with a car­bon tax or in­di­rectly with cap-and-tra­de re­gu­laa­tions. If the pro­vin­ces don’t, Tru­deau will im­po­se ea a car­bon tax. The im­pact of eit­her stra­tegy is the sa­me: me: mo­re ex­pen­si­ve for Ca­na­dians to get around, heat their ho­mes and keep the lights on. Pri­cing car­bon will ll in­crea­se the cost of al­most everyt­hing, in­clu­ding food.

A ty­pi­cal Ca­na­dian fa­mily will li­kely pay mo­re than $1,200 a year in new energy ta­xes by 2022 - and twi­ce­wi­ce that if Ot­ta­wa de­ci­des to apply its new tax ag­gres­si­vely.

Car­bon pri­cing isn’t the only way Tru­deau’s po­li­cies will raise elec­tri­city ra­tes. His or­der to pro­vin­cial go­vern­men­tsern­ments to shut­ter coal-fi­red sta­tions by 2030 will eli­mi­na­te a sour­ce of cheap and re­lia­ble po­wer from Ca­na­da’s energy mix. He­re’s what that means for one small pro­vin­ce: New Bruns­wic­kuns­wick has a sin­gle coal-bur­ning po­wer plant and NB Po­wer ower of­fi­cials ha­ve said clo­sing it would in­crea­se pro­vin­vin­cial elec­tri­city ra­tes by a stag­ge­ring 38 per cent.

Meanw­hi­le, U.S. ra­te­pa­yers fa­ce no car­bon tax. ax.

And Ame­ri­can energy costs will li­kely fall as Trump mp re­peals Pre­si­dent Ba­rack Oba­ma’s exe­cu­ti­ve or­der­sers res­tric­ting the ex­trac­tion and use of fos­sil fuels. What’s Ot­ta­wa’s res­pon­se to all this?

Tru­deau says Ca­na­da could win if the in­co­ming pre­si­dent re­jects plans to make U.S. energy mo­re ex­pen­si­ve. He told a Cal­gary bu­si­ness au­dien­ce last month, “We know that this is the way the world is going and if the Uni­ted Sta­tes wants to ta­ke a step back from it, qui­te frankly, I think we should look at that as an ex­traor­di­nary op­por­tu­nity for Ca­na­da and for Ca­na­dians Ca­na­dians.”

It’s a brav bra­ve fa­ce - but does it make sen­se?

Trump Trump’s energy po­li­cies twin­ned with deep tax cuts will re­du­ce Ca­na­da’sC com­pe­ti­ti­ve­ness.

Ca Ca­na­dian po­licy-ma­kers, and the pri­me mi­nis­ter, don’t h ha­ve to li­ke this chan­ge and may pri­va­tely cur­se it. But ou our fe­de­ral and pro­vin­cial go­vern­ments can’t pre­tend Trum Trump’s po­licy agen­da won’t ha­ve any im­pact on the econo eco­nomy when Ca­na­dian jobs are at risk.

C Ca­na­da’s energy sec­tor is al­ready con­cer­ned that go­ver go­vern­ment po­licy will soon put our country at a com­pe­ti­tiv pe­ti­ti­ve di­sad­van­ta­ge, and that in­vest­ment and jobs will mo­ve to the U.S.

In O On­ta­rio, so­me bu­si­nes­ses are al­ready eyeing nearby U.S. sta­tesst with mo­re af­for­da­ble energy pri­ces. On­ta­rio elec­tri­city pri­cesp ha­ve sky­roc­ke­ted thanks to costly pro­vin­cial re­gu­la­tions. Car­bo­nC pri­cing means bills for na­tu­ral gas, ga­so­li­ne and die­sel­die­se are going up next. The Coa­li­tion of Con­cer­ned Ma­nu­fa Ma­nu­fac­tu­rers of On­ta­rio, a group of small- and me­dium­si­zed bu­si­nes­ses,b has rai­sed the alarm and is ur­ging the go­ve go­vern­ment to re­ver­se cour­se or risk job los­ses. Ca­na­da’s long-term growth de­pends on its bu­si­nes­ses re­mai­ning com­pe­ti­ti­ve. Af­for­da­ble energy is part of the mix, along with rea­so­na­ble tax ra­tes. Li­ke­wi­se, the pros­pe­rity of Ca­na­dian fa­mil ilies is im­pac­ted by the pri­ce of ho­me hea­ting fuels, pow po­wer and gas. Dra­ma­tic pri­ce in­crea­ses lea­ve hou­seholds poo poo­rer, whi­le inex­pen­si­ve energy would mean hou­seholds ha­ve mo­re in­co­me for ot­her things.

With Ca­na­dian energy pri­ces set to in­crea­se re­la­ti­ve to U.S. pri­ces pri­ces, the­re will soon be an ad­di­tio­nal cost to Ca­na­da’s car­bon pol po­licy. That pri­ce is less in­vest­ment and lost jobs. Lo­wer U.S. ta­xe ta­xes will only com­pound the pro­blem.

Ca­na­di Ca­na­dian wor­kers and bu­si­nes­ses can’t af­ford such a shift. The Tru­deauT­ru go­vern­ment’s next mo­ve should be to over­haul its carb car­bon pri­cing plan to ac­count for the po­licy shift south of the bor­de bor­der. Ca­na­da needs a stra­tegy that doesn’t pe­na­li­ze bu­si­ne bu­si­nes­ses and or­di­nary Ca­na­dians. -TROYMEDIA

John Wi­lliam­son is pre­si­dent of Ca­na­dians for Aff Af­for­da­ble Energy.

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