a decade from now, when i write the Definitive History Of How The World Was Saved (don't hold your breath), 2003 will be identified as the year when green taxes first made it onto the political radar. Of all the enviro happenings this year, from the preservation of wild spaces to the city pesticide bans, the most transformative eco idea will turn out to be the reward-and-punishment potential of taxation. It's a simple concept -- tweak taxes so they can do the work of environmental restoration. Tax folks when they do harmful things that cost money to fix and don't tax them when they do the right thing that saves governments money. For years, this behaviour modification technique has languished in obscurity -- until this year, that is. That's when it was suddenly rescued by Winnipeg mayor Glen Murray. The western visionary rechristened the idea "value-based budgeting." Who said good ideas couldn't be well packaged politically? Murray says his scheme to refinance urban government "is an overhaul of a tax system that hasn't changed since before the Model T." It's a horse-and-buggy-era tax system, he says, based on home and property taxes, and it can't finance roads, sewers, water filtration, recreation centres and all the other social and public health expenditures of a modern city.
Winnipeg could no longer postpone hundreds of millions of dollars of expenditures for crucial infrastructure repair; nor could it raise property taxes by 43 per cent to pay for the repairs. That's when Murray came up with the idea of slashing property taxes and creating new service charges for people and companies that abuse public services.
To give a simple example, about 75 per cent of the costs of 911 emergency calls for police and ambulances are directly related to alcohol abuse -- barroom brawls, drinking-and-driving accidents, for example -- and should therefore be paid for through a tax on alcohol, not a tax on homeowners or general taxpayers.
Likewise, the costs of handling garbage should be borne by the people who have lots of it, not by people who don't. In most cities, garbage pickup of kitchen scraps is free, while conscientious citizens have to pay for a composter. A city that wants to reduce its garbage by a third with a composting program would be wise to change its incentive programs, the Winnipeg idea goes.
By the same logic, cities should stop charging people to park their cars overnight on the side of the road, since that's simply making use of an unused resource. Instead, they should tax residents for paved driveways, since paved areas can't absorb rainwater and force rain down the sewer, where it costs mounds of public money to clean before being sent into the lake.
Once cities get into the green swing of new tax strategies, they'll start looking at all the provincial and federal tax policies that cause grief for both cities and the environment. The standard rule right now is that any behaviour that harms both cities and the environment gets a tax break and a government grant. To get a sense of this, just take a look at energy policy.
Since 1970, federal and provincial governments have doled out $43.255 billion (yes, with a "b") in grants to fossil fuel companies while putting about $12 million a year into renewable energy, thereby insuring it remains uneconomic. Coal, unlike gas and oil, which are cleaner, pays no excise tax, thereby ensuring that Ontario Hydro will find it cheaper than conservation or natural gas. To add economic insult to environmental harm, the tax and excise subsidy for coal favours the import of U.S. coal into Ontario over domestic oil and gas. (For more examples of this raft of dumb and dumber federal policies, check out Lisa Salsberg's 2002 report for the National Round Table on the Environment and Economy.)
There are all kinds of ways present-day tax policy rewards bad behaviour. Why, for example, do the feds charge cities GST for public transit vehicles -- costing Toronto over $15 million a year -- while the province doesn't pay any GST for materials to build roads? Why is employer-provided space for parking a tax-free employment benefit while a free transit pass is taxed as extra income?
Why do enviro-minded farmers or rural residents who want to donate land to a nature preserve or a land trust for future farmers get a tax receipt that's worth virtually nothing, encouraging them to sell to residential developers instead?
A tax revolt inspired by green visions -- designed to cut government costs rather than government services -- will be hard to stop. That idea got launched into mainstream politics in 2003. Keep your eye on it -- it's going far. ****