Environmental Economics with Jack Layton

When it comes to public speaking, Jack Layton is by far the greatest orator among the major party leaders. Listening to him as he cagily avoided answering Anna Maria Tremonti’s questions this morning I was impressed with his skills but wary (and weary) of his rhetoric on the environment and the economy.

The New Democrats are enjoying recent polls reporting that 62% of Canadians would like to see the NDP as the Official Opposition. Can the NDP move from political conscience to political power? Layton thinks so. (I’m slightly more skeptical.)

Because the Liberals are promoting a carbon tax, the NDP oppose it. Layton is promoting the cap and trade system of punishing corporate polluters, setting definitive targets and enforcing legislation. As a side note, he mentioned that four provinces, 11 states, and several European nations have committed to a cap and trade system, but avoided saying he was following US environmental policy. No mention of the eight EU nations that also have carbon tax systems or BC's carbon tax plan (brought in by a Liberal government).

The New Democrats have been upstaged by both the Liberals and the Greens in environmental policy, so they are downplaying this issue and turning it into a matter of economics. It’s a sad day when the NDP would rather agree with the Conservatives than their comrades on their own side of the political spectrum. Layton makes a big show about opposing Stephen Harper, but is ready to plop on his cap and cardigan in this case.

But I digress. The revenues from this proposed cap and trade system ($2.5 billion in the first year) would then be invested in public transportation, green home renovations and a green manufacturing shift.

Investing cap and trade revenues in public transportation is a noble and worthwhile goal. Canada’s public transit is an absolute disgrace. I like this part.

Layton has been quoted as saying he would stop oil sands development. On CBC radio this morning, he quantified that statement, saying that he would not approve any further development without solving the environmental and health concerns that are currently a huge problem. In other words, he isn’t going to stop the development, just trip it up in red tape. The NDP would also immediately stop tax subsidies for large oil companies.

Okay, so Layton wants to punish big polluters (aka oil companies), stop their subsidies, and slow oil sand development. Fact of the matter is, the oil sands are providing income for not only Albertans but many, many other Canadians. You would be hard pressed to find a resident of BC, Saskatchewan or the Maritimes who hasn’t got a relative in Fort McMurray right now. Stop this development and those people end up back at home without work, drawing unemployment and welfare, depressed and addicted to drugs. If you think I’m exaggerating, I urge you to visit rural New Brunswick.

Pull subsidies from oil companies, roll back their corporate tax cuts, then introduce carbon penalties? That sounds like a great way to drive a company into the ground or send it to friendlier territory. You might as well wave big “get the heck out of my country” flags and flip them a Trudeau salute. You cannot treat a company, any company, in such a manner, and expect them to gratefully stay within your borders and employ your citizens. Business does not work that way.

Yesterday Layton stood at an auto manufacturing plant and announced $8 billion in proposed spending ($2 billion a year) to boost and restructure the manufacturing industry. He promised balanced budgets every year, should he gain power and the creation of a jobs commissioner to address employment and retraining of manufacturing employees. He also discussed keeping Canadian raw materials in Canada (such as oil and softwood lumber) to create manufacturing jobs.

Unless Canada violates its trade agreements, it is not feasible to restructure and grow the flagging manufacturing industry by processing raw materials at home. Jobs commissioner? Leave it to the NDP to spend more of our tax dollars on government salaries.

Where will this $8 billion dollars come from to aid the manufacturing industry? Cap and trade penalties? Unlikely. Increased corporate taxes? Excellent. So the NDP will take money from profitable businesses through taxes, sink it into unprofitable businesses and bureaucrat salaries, and hope it will right our economic wrongs. Sounds like a great plan to me. Excuse me if I don’t run out and order an NDP lawn sign.

Shifting to green manufacturing and green products is a good idea. Helping Canadians retrofit their homes to be more energy efficient is also a good step. A government cannot, however, spend money making products that are not in demand. You can make all the solar panels you want, but until Canadians have a good reason to buy them, they won’t.Especially when they are forced to pay more for the same products than our neighbours to the south. But wait, they won't be buying much of anything without income.

First you create the demand, then you increase product production to meet the demand. Simple economics.

That brings up the issue of NAFTA, which Layton doesn’t like. He didn’t go so far as to say he wanted to throw it out the window, but he did say it needs serious restructuring. On this, he and Barack Obama agree.

We all have a conscience. Aren’t you glad it doesn’t run our country?