Stephane Dion: Higher taxes make Canadian food more appealing
Maybe there is a subtlety to the economic principles involved that I'm not getting. But according to Stephane Dion, if I force a Canadian farmer to pay more in taxes, he'll be selling more produce than a foreign farmer who pays none of those taxes.
Liberal Party leader Stephane Dion is a visionary. That is to say, he sees visions. Well, to put it more bluntly, he's seeing things. He thinks a tax on Canadian carbon emissions will make Canadian produce more cost competitive:
Putting a price on carbon emissions will lead to a more restrained use of oil, gas and coal and even help stock the shelves of Canadian supermarkets with goods produced by local farmers, says federal Liberal Leader Stéphane Dion. He was in Peterborough April 24 visiting Trent University’s Water Quality Centre and holding a town hall meeting at RE* on George Street.
Why don't supermarkets stock shelves with local grown foods already? Why cut into the profit margins by importing food from the US or South America when the food was always right here?
If the food is just around the corner, then why not put that on the shelves?
Clearly one of two reasons:
1. The food is not around the corner.
2. The food is not cheaper.
Of course, not every food on the shelf can even be grown locally. This is, quite literally, an apples and oranges comparison. We don't grow oranges in Canada -- the climate is not suited for it.
So take oranges, and point (1), off the table. Consider only apples, and point (2).
Why import apples? Well, first off, plenty of Ontario produce (apples included) is already on the shelves. We don't need to tax carbon emissions to make that happen.
But would a tax on carbon emissions put more Canadian products on the shelves?
First off, if a food is seasonal, it will be available when it's available, and no tax can change that. We import food in large part to keep shelves stocked during the local off season. Apples from South America might be more expensive because of Stephane Dion's tax increase, but that won't make Ontario apple trees blossom in the middle of the winter. Or any other fruit tree, for that matter.
And second, just how much can Stephane Dion expect his tax to affect the cost of a South American apple? It is grown and picked on a farm in South America, sorted and trucked to a ship, and brought to port in Halifax. At that point, it is put on a Canadian truck and brought to the market.
So the last leg of the journey will cost more because of Stephane Dion's tax on the carbon emissions made by the Canadian truck driver. But the total cost of the apple includes the cost of the farming and fertilizing and picking and sorting and shipping that happened prior to its arriving in Canada.
Somehow, I can't see how Stephane Dion's tax can affect that. I suppose Stephane Dion's Liberals could calculated the carbon footprint of that process, and slap an equivalent carbon tariff on the products at the point it is imported, but I doubt that would be legal.
At the end of the day, Stephane Dion's carbon tax could only apply to Canadians.
When you think about it, it is likely to make Canadian foods more expensive!
The Canadian farmer pays for Stephane Dion's carbon tax on the fuel he buys for his tractor, on the carbon footprint associated with the fertilizer, for the wages he pays to his workers who drive to the farm and so now want to be paid more to afford the cost of gas, and so on and so forth.
The South American farmer pays none of those costs. Sure the South American product has to be shipped, but I'm sure shipping magnates like former Liberal leader Paul Martin know how to keep those costs under control even as fuel costs rise. The first thing Martin has to do to make sure that ships are not registered in Canada, so that Stephane Dion's carbon tax can't be applied. Oh wait, the international fleet of Paul Martin's Canadian Steamship Lines were all re-flagged through the 1990s, thus ensuring that Stephane Dion's hoped-for carbon tax will be paid by other Canadians, and not directly affect Paul Martin's profits.
Rising fuel costs will make imported food more expensive. Rising fuel costs will also make locally grown foods more expensive, but it is possible that with less distance to market, local foods could be more competitive (which only matters if the competition is head-to-head, and that only happen when the growing seasons coincide). Put a carbon tax just on Canadian fuel consumption, though, and you're just as likely to have erased any price advantage Canadian farmers had when competing for shelf-space in a Canadian supermarket.
Food will cost more. Less will be sold as Canadians make do with less as Stephane Dion's carbon tax increases the price of everything. Farmers will pay more to run their operations, and sell less of their more expensive product to Canadians struggling with less money to spend on food.
Stephane Dion for a hungrier, poorer Canada!
