Carney and Co are lowering gas/diesel taxes:
The move means that the cost of gas will drop by 10 cents on a litre of gasoline and four cents per litre of diesel starting on Monday and lasting until Labour Day. The fuel tax holiday, which Carney said would also see the four cent per litre excise tax removed on aviation fuel, is expected to cost an estimated $2.4 billion.
One of the aims is to improve the affordability hit we’re taking because of the US/Israel war with Iraq.
Does the tax holiday make sense to you? Could it be done better?
It’s a regressive move. The poorer someone is, the less likely they are to own a car and be able to drive. So it isn’t helping people who need it.
Worse, there’s no guarantee consumers will get ten cents off at the pump, since the sellers could just raise prices.
And, it’s encouraging fossil fuel use as the climate crisis is getting worse.
A better solution is to help people who need it directly. Up the GST tax credit, or offer a one-time cheque to low income households. That directly helps people who need it. Folks who make more still feel the pain, so they have incentives to change their behaviour.
It’s regressive in some ways, and not in others. If you’re completely unemployed, you might not drive but generally speaking low wage workers have to do the most commuting, often living furthest from their job, in places with poor transit access if any. They often are forced to use the least efficient older vehicles as well. The biggest savings however will be in commercial transport which would have been passed on through rising costs for groceries and essential goods, which again will hurt those already struggling more than the wealthy. Sudden unpredictable price shocks are always absorbed by the poor the most.
I like this response. It’s common sense and looks at things from realistic angles instead of “Make gas free - yeah drive ma truck git r done!” or “The socialist enviro revolution must happen now and the people must be starved of gas and clamour for the government high speed rail to be built immediately in one year” - for the record, I would prefer people transition to EVs and for high speed rail to become commonplace (or just exist period) but at the moment those are longer-term goals.
Thanks! At the moment it seems like a short term problem that needs short term solutions.