Friday, August 18, 2006

Graham: Regulation if necessary, but not necessarily regulation

The Liberals pledged today to scrap the Lord gas-tax regulation strucutre but to look at alternatives:

For immediate release
August 18, 2006

Graham will eliminate “Lord Tax Hike” of 3.8 cents on gasoline
Lord Gas Price Regulation to be scrapped

Fredericton – Liberal Leader Shawn Graham is vowing that a Liberal government will ensure New Brunswick has the lowest provincial excise gas taxes east of Alberta. Currently, New Brunswick drivers pay 14.5 cents a litre in excise tax including a total 3.8 cent increase added by the Lord Progressive Conservatives. “By eliminating the Lord tax hike on gasoline, New Brunswick will have the lowest provincial excise tax on gasoline east of Alberta,” Graham stated.

“Gas prices are hitting New Brunswick’s pocket books hard and we need leadership on this issue. The Lord Government has only given New Brunswickers gas tax hikes and failed regulation,” said Graham. “It’s time for a change.”

“We can’t control world markets but we can more money in people’s pockets. That’s why a Liberal government will scrap the 3.8 cent Lord tax immediately and we will ensure that New Brunswick’s provincial excise tax on gasoline remains the lowest east of Alberta throughout our mandate.”

As well, drivers of non-commercial diesel vehicles will enjoy an equivalent tax rebate when they renew their registration. “We will provide a break to people who choose to purchase and drive diesel cars, which are very fuel efficient. Given the different market structure for diesel, a reduction in vehicle registration fees would provide the equivalent relief to these drivers.”

Graham has also committed to scrap the current gas regulation scheme and work with consumers and stakeholders to develop a new framework for gas prices within 120 days of the election.

“It’s obvious the current regulation scheme isn’t working. It’s not working for consumers and it’s not working for our small, independent retailers,” said Graham. “We will get rid of these failed regulations and work with New Brunswickers to create a new environment that ensures gas tax cuts are passed on to the consumer.”

Eliminating the Lord excise tax hike and reducing the cost of non-commercial diesel vehicle registration will mean that the Province will forego $42.8 million in revenue. However, this reduction in revenue will not affect funds currently dedicated to road construction and maintenance.

“As per our Charter for Change, we will rise to the energy challenges faced by New Brunswickers.”


I think that this is the right move for Graham because I don't think that people are swallowing the gas regulation in general nor specifically when you contrast it to the systems in neighbouring provinces. Though he is quite vague with his statement that he would scrap it but the alternativer is to be determined based on studies and consulation in the first four months of power, it may work. In theory this is the right way to go about it. This is a complex issue and an opposition party doesn't have the resources of a bureaucracy to study models and bring in experts. That said, this sort of thing could be painted by Lord as a question of whether Graham really means what he says, whether he is smart enough to come up with a plan, etc, etc

However, this is not dissimilar to Graham's "Public Insurance if neccesary, but not neccesarily Public Insurance" style pledge in 2003. As you may recall, Graham pledged to bring in a series of regulations that would lower insurance by 25% in 90 days. If it was not effective then and only then would he bring in the public insurance.

UPDATE: CBC covers this announcement here quite positively.


Anonymous said...

Hello, we're the liberal party. Vote for us, because inconsistency is our middle name.

We're all for conservation, we'll even subsidize those people who pay over 25 thousand dollars for their vehicles.

Ooops, but conservation doesn't apply at the pumps-just for rich people. We'll cut the gas tax so you can drive more and more with no effect on your pocketbook. After all, Irving and friends have to make a living you know!

So just because consumptive taxes have been proven to be the best economic determinant for consumption doesn't mean it applies here, this is 'magicland'. So you can drive more, pay less, hope for the best, and somehow magically that will turn into 'conservation'. Just think of it as the liberal platform alternative to 'the prosperity plan'. Remember, this is 'upside down land'. Paying less means you will conserve more!

Just because almost every country in the world is taxing consumption doesn't mean anything here-we're 'rebels'. Just look at how well the lowest tax rate in Canada has worked to bring in small and medium businesses....oops, OK, DON"T look at that!

But don't worry, even though we SAY we'll get rid of regulation,that doesn't mean anything. We're going to have 'studies' because apparantly for the past three years we've been so retarded we haven't picked up a single book on energy policy. This is a 'complex issue' and one that can only be dealt with by 'studies'. Sure, we should have done them long ago, but come on, we're the opposition and are very busy making catcalls and 'moo' noises at government members.

So for energy, think of the liberals. Another nuclear plant and cheaper gas will of course mean people will conserve-well why wouldn't they, I'm sure they've watched 'the nature of things'. After all, you want to save those polar bears in Manitoba don't you?

And don't worry about that extra 42 million we'll be losing, most of it goes to the trucking industry anyway. We'll just keep jacking up your power rates when we need the extra cash.

Vote for the upside down party. That's just how things work here.

Anonymous said...

Oh, yes, and don't worry, for the next four years if anything goes wrong we can blame it on the financial condition the previous government left us in.

nbpolitico said...

anon at 11:23 - I presume you are refering to the Tory strategy for the past 7 years?

Alvy Singer said...

Reducing consumption is the way to go. Everybody knows, nobody dares say it. Frustrating stuff.

nbpolitico said...

That is the problem with our system Alvy. Less consumption is the solution but anyone who says that will not get elected.

Perhaps we should create a benign oligarchy.

Cooker boy said...

I fail to be impressed so far with either party's platforms on gas. I'm baffled how the Libs will manage to lower consumption while making fuel more affordable? Add to that the fact that they want to do it without regulation. Come on, that wouldn't work! You really think oil companies and retailers are that ethical?

As for the Tories, I think what we have seen in the past week is what happens when you make policy on the fly. That being said, if we would not have regulation in place you would all be paying $1.40/L or higher right now and you know it.

Anytime you bring in something new, it takes a while to work out the kinks. Since the PUB now knows how to act, I would expect that no inteference from the Govt is required in the future.

Besides, are you not glad that the Premier stepped in when he realized that we were being gouged. You don't overhaul an engine if all you need is an oil change do you?

The other thing I have noticed is that no one, media or blogs, point out that the retailers and suppliers can drop their prices at any time if the price of oil goes down on the markets, why didn't they? They should not have to wait for the PUB to dictate a lower price if they are serious about not needing regulation.

nbpolitico said...

cooker - as I said in my post, I expect the Liberals to get slammed for saying they can cut gas taxes in an unregulated market and actually expect it to be passed on to consumers.

Cooker Boy said...

I agree, I just felt like going into a rant... ;-)

nbpolitico said...

:p I guess that is what blogs are for!

Anonymous said...

If you really want lower gas prices there is only one thing that has been proven to lower them. Nationalize the industry. Venezuela has the lowest prices in the world, and its only partly nationalized. Iraq used to have the cheapest, it was 10 cents a litre. Canada is the only country in the industrial world that doesn't have a gas plan. The plan is, we sell it and once its gone that's it.

Norway now has over 1 TRILLION dollars in its oil fund to cover once oil runs out or for any other purpose. Bolivia is nationalizing theirs and Columbia is talking about it. Talk about saying the unthinkable.

nbpolitico said...

Canada could have really cheap gas due to our huge reserves if we nationalized the industry or even imposed national regulations. The catch is we would have to withdraw from all of our free trade agreements in order to do so.

Anonymous said...

Not ALL of our free trade agreements-just one. Ask cattle ranchers, lumber companies, postal workers and many others how much they'd like to see that. Then oil could actually be used as a bargaining chip in other sector negotiations. Oh well, our grandchildren can make fun of how stupid we are and how little we provided for them.