View topic - Added fuel costs and carbon tax rebates on 2018 tax returns

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PostPosted: April 2nd, 2019, 8:19 am 
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With higher carbon tax fuel costs coming this year along with climate change, it's possible to lower expenses with a fuel cost rebate. Some of the recent news reports on the federal government's plan to offset the cost of its carbon tax for residents of Ontario, New Brunswick, Manitoba and Saskatchewan state that the rebates could be missed by people filing their 2018 taxes.

The new Climate Action Incentive has been added to standard tax forms, at line 449... you get the credit added on as part of any refund. If you've already filed your taxes and have missed the line for the rebate, an amendment may be necessary to get the credit (the alternative may be that CRA picks up on the omission and credits anyway, but too early to say for sure). Dollar amounts are given below, along with info at the link.

In Ontario, an extra 10% can be added on to the rebate for extra fuel costs for remote area residents... check the maps at the links below to see if you qualify. Single parent families might also qualify.

Quote:
How Climate Action Incentive payments will be calculated – An Ontario family of four will receive $307 in 2019

Under the proposed approach, most of the proceeds the federal government collects from Ontario through the fuel charge will be returned directly to Ontario’s individuals and families through Climate Action Incentive Payments.

$154 for a single adult or the first adult in a couple.
$77 for the second adult in a couple. Single parents will receive this amount for their first child.
$38 for each child in the family (starting with the second child for single parents).


https://www.canada.ca/en/environment-cl ... tario.html

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PostPosted: April 2nd, 2019, 10:02 am 
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The rebate is enough to cover us, although we do not use heating fuel (almost exclusively heat with wood).

We are a family of 6 with 2 kids in hockey, 2 in ringette so we put on a combined 100,000km per year. Thankfully we made the switch to very fuel efficient vehicles (Prius) so at 5L/100km we will use 5500L of gas at 5 cents per liter = an additional $275 per year carbon tax. The rebate for us of $421 will cover us for that amount.

If we were still driving a gas guzzler it would be a different story!


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PostPosted: April 2nd, 2019, 12:22 pm 
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Basically, if the program works as advertised it will have zero impact on carbon emissions but take money out of the economy due to the overhead of the program.

A constructive program would invest every dollar in carbon neutral power generation and/or storage to actually replace carbon emitting power generation. It isn't that a carbon "tax" can't work, it's just that Canada at all levels insists on being as dysfunctional as possible in misusing the money.

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PostPosted: April 2nd, 2019, 6:10 pm 
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Splake wrote:
Basically, if the program works as advertised it will have zero impact on carbon emissions but take money out of the economy due to the overhead of the program.

A constructive program would invest every dollar in carbon neutral power generation and/or storage to actually replace carbon emitting power generation. It isn't that a carbon "tax" can't work, it's just that Canada at all levels insists on being as dysfunctional as possible in misusing the money.


I disagree completely.

Governments have a poor record in "picking winners". It is far more likely that the funds would be squandered on programs that in the end wouldn't work. Our previous government in Ontario was an example: did it really make sense to subsidize buyers of luxury Tesla's? To me it makes far more sense to use the power of the free market to reduce carbon emissions. Businesses can find the best way to lower their emissions and sell their widgets at a more competitive price, thereby undercutting their competition and taking a larger share of the market. Consumers will maintain most of their spending power because of the rebates but the price signal will encourage them to switch to lower carbon alternatives.

It will also be an easier political sell if all or nearly all the funds are given back as rebates.

The Nobel Prize in Economics went to economists who did the research on carbon pricing. It can work if we give it a chance and keep jacking it up every year. But I fear we won't. Despite this being the most "conservative" solution possible to the climate crisis, Conservatives these days seem to prefer top-down regulation or, better still, doing nothing.

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PostPosted: April 3rd, 2019, 8:21 am 
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SB... the rebates will probably cover my costs as well, since I don't drive much. Also heat with wood which should be carbon-neutral in theory (the new tree growth removes carbon). Something tells me these rebates aren't going to last, with the political upheaval and public displeasure on the mess developing in Ottawa.

Splake... the carbon tax is applied to business and industry as well, and from the little I've been able to read, this is where the shift to carbon reductions will be (maybe), while at the same time protecting the little guy. To me, it seems like a political gesture mostly, indicating that Canada is on board with climate change initiatives, together with Europe, the states (post-Trump), China and anyplace else. Politicians will spin this, OTOH scientists waving their thermometers and hard numbers may not... it's what happens globally that really counts. Carbon loadings are still increasing and 85% of the world still depends on oil, coal, and natural gas for energy. In the states, Trump has been busy rolling back environmental regs and CO2 emissions increased from 2017 to 2018. On the other side, Democrats are proposing all sorts of wonderful things, including the Green New Deal, which IIRC promises to cut CO2 emissions by half in ten years, and again IIRC, nobody under that plan will get to fly.

Kinguq, yup, business and industry will have to come up with strategies to reduce carbon with government incentives to kick things off... it might mean the entire world goes nuclear, or it might mean that solar and wind gets so cheap it's competitive with coal. Still early days. Maybe there just hasn't been a climate crisis bad enough to force the global change yet... difficult to predict how the universe will unfold.

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PostPosted: April 3rd, 2019, 12:28 pm 
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kinguq wrote:
Governments have a poor record in "picking winners".


I think this statement nails it and we are probably mostly on the same page. The question isn't whether or not a well implemented "carbon tax" program could have a positive impact but rather whether this particular program will.

The tasks of collecting the tax and then redistributing it have real costs associated with them in terms of people, equipment and power. These real costs mean that the system physically can not return every $ to the consumer so the system will add burden and take money out of the economy.

By returning the money to the consumer with a fancy label, there is no control over how it is spent. Folks who have already purchased a Prius now have some extra cash for new hockey and ringette sticks (and the rebate is only enough for a couple of hockey or ringette sticks at current prices). Blue collar plumbers, electricians, carpenters, etc. whose livelihood requires something bigger than a Prius now have less cash to even consider a "green" investment. The folks in the middle for who the exercise is a financial wash have neither incentive or reason to change what they are already doing.

As for converting home heating from gas to electric (which would be totally dysfunctional), the rebates are several thousand dollars a year short of motivating that kind of change.

[quote = "frozentripper"]To me, it seems like a political gesture mostly, indicating that Canada is on board with climate change initiatives,...[/quote]

I agree.

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PostPosted: April 3rd, 2019, 4:12 pm 
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Splake wrote:
kinguq wrote:
Governments have a poor record in "picking winners".


I think this statement nails it and we are probably mostly on the same page. The question isn't whether or not a well implemented "carbon tax" program could have a positive impact but rather whether this particular program will.

The tasks of collecting the tax and then redistributing it have real costs associated with them in terms of people, equipment and power. These real costs mean that the system physically can not return every $ to the consumer so the system will add burden and take money out of the economy.
.


The estimated cost is about 10%. But this money does not "exit" the economy. Real people do the work and get payed for it. Any carbon taxation system, including cap and trade, will have a comparable administrative cost. As will regulatory measures. There is no getting around that.

Splake wrote:
By returning the money to the consumer with a fancy label, there is no control over how it is spent. Folks who have already purchased a Prius now have some extra cash for new hockey and ringette sticks (and the rebate is only enough for a couple of hockey or ringette sticks at current prices). Blue collar plumbers, electricians, carpenters, etc. whose livelihood requires something bigger than a Prius now have less cash to even consider a "green" investment. The folks in the middle for who the exercise is a financial wash have neither incentive or reason to change what they are already doing.


And this is where we disagree. The incentive remains because of the price signal. If I go into a bar, and a Keith's is 1 dollar cheaper than a Molson, I can buy the Keith's and save a buck. If the bartender is giving a free dollar to every customer, I still save the dollar by buying the cheaper beer, but maybe I'll buy two instead. Or maybe I prefer Molson's, so that option remains. And yes, there is no control over how it is spent. But as I said, I don't trust government to pick winners. I have greater trust in consumers to look out for their own interests.

Of course the carbon price is low now, but it is supposed to rise every year, as will the rebates. The system gives us a tool that we can use to change our behaviour (and that of businesses) to lower our carbon emissions. The actual amount of the rebate is of course not enough to buy a Prius, but the rising price of gas should persuade some people that they perhaps don't need a pickup truck next time they buy.

All that said, I am pessimistic. I fear the Cons will win the next election and throw the entire system out the window. They have already indicated that they will abandon our Paris commitments, which were already woefully inadequate. Given the recent climate reports from IPCC and from our own government, it is hard to have any hope that our children can avoid living in a very degraded world.

Kinguq.


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PostPosted: April 5th, 2019, 6:53 am 
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Last night's Ideas on CBC radio covered redefining capitalism to deal with climate change, which at the moment it does not. Mostly philosophy and offers no specifics. But does provide insight on the degree of change necessary to turn things around. Ideas is a prime time radio show in the tent at some remote location, and would have been great to listen to on an early spring trip.


https://www.cbc.ca/radio/ideas/how-reth ... -1.5084547

PS... the Alberta election's also interesting along these lines.

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PostPosted: April 5th, 2019, 7:37 am 
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Curious if anyone knows how the federal exemptions are structured. In Manitoba, the carbon tax plan we had for a moment excluded the worst emitters in the province.


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PostPosted: April 5th, 2019, 8:09 am 
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Neil Fitzpatrick wrote:
Curious if anyone knows how the federal exemptions are structured. In Manitoba, the carbon tax plan we had for a moment excluded the worst emitters in the province.


There is apparently "Targeted Relief for Farmers and Fishers, and Residents of Rural and Remote Communities" which amount to exemptions for some of these groups. Doesn't appear to be any exemptions for big industries.

https://www.fin.gc.ca/n18/data/18-097_3-eng.asp

frozentripper wrote:
Last night's Ideas on CBC radio covered redefining capitalism to deal with climate change, which at the moment it does not. Mostly philosophy and offers no specifics. But does provide insight on the degree of change necessary to turn things around. Ideas is a prime time radio show in the tent at some remote location, and would have been great to listen to on an early spring trip.


Carbon taxes offer a means of bending capitalism to our will. Unfortunately the will just doesn't seem to be there.

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