Jay Currie

“We know that they will pass on part of their costs to their consumers because they cannot eliminate the emissions overnight, with all the goodwill of the world. We know that,” he said.

Big polluting oil companies would pay a hefty price for emissions, but the Liberal carbon tax plan projects any costs passed on to consumers at the pump would be minimal as global pressures would keep prices from Canadian companies competitive. the ottawa sun

Poor Dion, he really has not a clue. “Global pressures” are what drove oil to the $140 a barrel mark today; but gas, heating oil, natural gas and coal fired hydro are subject to exactly no “global” pressure because there is no “global” market for gas in your car or oil to keep you warm next winter.

If M. Dion is counting on “global pressure” he is simply being silly. Canada is a net exporter of oil and natural gas. We will certainly have to meet world price on those exports and the extractors will have to eat whatever the eventual cost of “Son of NEP” is. And they will be fine with that because both oil and natural gas prices are at historic levels. And they will sell downstream in Canada at the same price the world is paying.

However, the price of your liter of gas is only indirectly related to the world price of oil. Next week, having blown our $100.00 BC Government rebate on the traditional, Scott Reed approved, beer and popcorn, British Columbians will be paying about 2 cents a liter more at the pump. This will have nothing to do with the world price of oil; it will be entirely about the tax Campbell is imposing on carbon. No refinery or gas station is going to just “suck it up”, rather they are going to pass it through as they pass through the .10/liter federal excise tax and assorted provincial taxes.

The world market price determines the cost of the inputs; but the tax – any tax – is levied on the downstream outputs.

Strangely, my monthly bottle of Jameson without the tax would cost about $7.00 instead of near enough to $30.00. And, strangely, if the BC Government added another $2.00 per bottle “anti-fun” tax it would cost $32.00. The lads at Jameson are no more likely to absorb the tax than the Saudies will pay for Gordo’s gas tax.

However, Dion and the people advising him are, apparently, just dumb enough to think the average Canadian is simply too stupid to notice.