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TELEGRAPH JOURNAL COLUMN: Concerns about the carbon tax rippling through Canada’s economy

Ottawa’s carbon tax increases the cost of nearly everything New Brunswickers buy, from bananas to diapers. The workers who transport these goods, and a majority of Canadians, share concerns about the increased costs of the carbon tax rippling through the economy.

The reason the cost of everything is going up is that transporting goods from point A to point B has become more expensive thanks to the new carbon tax on gasoline, diesel and other fuels. In April, the New Brunswick government released a video profiling the trucking industry in the province.

“It will have an immediate impact on our business, the new carbon tax,” said Vaughn Sturgeon, president and CEO of trucking company The Warren Group. “It’s going to add six figures of cost a year to what we do as a small and midsize employer in New Brunswick.

“There’s no way for us to recover this cost except to pass it on to the New Brunswick consumers.”

The Atlantic Provinces Trucking Association also spoke out in the video. “The impact to our industry with the new carbon tax is obviously an added cost that most people didn’t budget for,” said executive director Jean-Marc Picard. “The ones who are going to pay the most are consumers … Everything will be more expensive now.”

The concern over the carbon tax for the trucking industry in New Brunswick is understandable. In a rural province, we simply need to transport most goods. For the job creators in this industry, the impacts were real, and consumers will get hit twice.

On top of the direct costs, the impacts of Ottawa’s carbon tax on competitiveness, wages and employment has Canadians concerned.

Recently, SecondStreet.org hired Nanos Research to conduct some polling on carbon taxes. The data showed that Canadians are twice as likely to say carbon taxes will make Canada’s business environment less competitive (39 per cent) than more competitive (18 per cent). Canadians here in Atlantic Canada were among the most likely to express this concern.

Canada’s direct competition with the world’s largest economy, the United States, makes cost increases imposed by government additionally challenging. Workers are more mobile than ever, and New Brunswick companies are having to compete with American companies that don’t have to pay a carbon tax.

Good jobs could keep more workers in the province, but the same polling data shows Canadians are concerned about the impact of the carbon tax on jobs. A majority of Canadians (58 per cent) think carbon taxes will make it harder for businesses to pay their workers or hire new ones, versus those who believe it will have no impact (33.5 per cent).  

These concerns are consistent with the findings of a member survey conducted by the Canadian Federation of Independent Business in 2019, which found that 87 per cent of small businesses in New Brunswick, Manitoba, Saskatchewan and Ontario do not support Ottawa’s carbon tax.

A majority of these businesses could not pass the costs onto consumers in the short to medium term, meaning it could instead come at the expense of job creation, wages or new business growth.

It’s federal election season and the carbon tax issue is likely to become steeped in rhetoric. But from the truck driver to the restaurant server, Canadians’ concerns about Ottawa’s carbon tax are real and widespread. In New Brunswick, taxpayers and businesses are picking up the tab while their competitors in other nations are not.

 

Paige MacPherson is a contributor to SecondStreet.org and is the Atlantic Director of the Canadian Taxpayers Federation.  

This column was published by the Telegraph-Journal on August 22, 2019

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Prevention – reduce demand in the first place

If Canadians lived healthier lives, we could reduce demand for emergency services, orthopaedic surgeries, primary care and more. 

For instance, if you visit the Canadian Cancer Society’s website, you’ll read that “about four in ten” cancer cases are preventable. The Heart and Stroke Foundation notes that “almost 80 percent of premature heart disease and stroke can be prevented through healthy behaviours.” A similar number of Diabetes cases are also preventable. 

Many joint replacements and visits to ERs and walk-in clinics could also be avoided through healthy living. 

To be sure, not all health problems can be avoided through healthy living – everyday the system treats Canadians with genetic conditions, helps those injured in unavoidable accidents and more.  

But there is an opportunity to reduce pressure on the health care system through Canadians shifting to healthier lifestyles – better diets, more exercise, etc. 

To learn more, watch our Health Reform Now documentary (scroll up) or see this column. 

Partner with non-profits and for-profit clinics

European countries will partner with anyone who can help patients. 

It doesn’t matter if it’s a non-profit, a government entity or a private clinic. What matters is that patients receive quality treatment, in a timely manner and for a competitive price.  

In Canada, governments often delivery services using government-run hospitals instead of seeing if non-profit or private clinics could deliver the services more effectively. 

When governments have partnered with non-profit and private clinics, the results have often been quite good – Saskatchewan, Ontario and British Columbia are just a few examples of where partnerships have worked well. 

Canada should pursue more of these partnerships to reduce wait times and increase the volume of services provided to patients.  

To learn more, watch our Health Reform Now documentary (scroll up) or see the links above. 

Make cross border care more accessible

In Canada, citizens pay high taxes each year and we’re promised universal health care services in return. The problem is, wait times are often extremely long in our health system – sometimes patients have to wait years to see a specialist or receive surgery. 

If patients don’t want to wait long periods, they often have to reach into their own pocket and pay for treatment outside the province or country. 

Throughout the European Union, we also find universal health care systems. But a key difference is that EU patients have the right to go to other EU countries, pay for surgery and then be reimbursed by their home government. Reimbursements cover up to what the patient’s home government would have spent to provide the treatment locally. 

If Canada copied this approach, a patient waiting a year to get their hip operation could instead receive treatment next week in one of thousands of surgical clinics throughout the developed world. 

Governments benefit too as the patient is now back on their feet and avoiding complications that sometimes come with long wait times – meaning the government doesn’t have to treat those complications on top of the initial health problem. 

To learn more, watch our Health Reform Now documentary (scroll up) or this shorter video. 

Legalize access to non-government providers

Canada is the only country in the world that puts up barriers, or outright bans patients from paying for health services locally. 

For instance, a patient in Toronto cannot pay for a hip operation at a private clinic in Toronto. Their only option is to wait for the government to eventually provide treatment or leave the province and pay elsewhere. 

Countries with better-performing universal health care systems do not have such bans. They allow patients a choice – use the public system or pay privately for treatment. Sweden, France, Australia and more – they all allow choice. 

Why? One reason is that allowing choice means some patients will decide to pay privately. This takes pressure off the public system. For instance, in Sweden, 87% of patients use the public system, but 13% purchase private health insurance. 

Ultimately, more choice improves access for patients. 

To learn more, watch our Health Reform Now documentary (scroll up) or watch this short clip on this topic. 

Shift to funding services for patients, not bureaucracies

In Canada, most hospitals receive a cheque from the government each year and are then asked to do their best to help patients. This approach is known as “block funding”. 

Under this model, a patient walking in the door represents a drain on the hospital’s budget. Over the course of a year, hospital administrators have to make sure the budget stretches out so services are rationed. This is why you might have to wait until next year or the year after for a hip operation, knee operation, etc. 

In better-performing universal health systems, they take the opposite approach – hospitals receive money from the government each time they help a patient. If a hospital completes a knee operation, it might receive, say, $10,000. If it completes a knee operation on another patient, it receives another $10,000. 

This model incentivizes hospitals to help more patients – to help more patients with knee operations, cataract surgery, etc. This approach also incentivizes hospitals to spend money on expenses that help patients (e.g. more doctors, nurses, equipment, etc.) rather than using the money on expenses that don’t help patients (e.g. more admin staff). 

To learn more about this policy option, please watch our Health Reform Now documentary (scroll up) or see this post by MEI.