Engineers and Economists on Climate Change

The exchange of opinions on the economic impact of climate change and the proposals for changes required, if any, and in what order, tend to be lacking in the details that are the area of expertise of economists and engineers who have studied and practiced real proposals and projects. For instance, economists interviewed by CBC reporters say that both Prime Minister Justin Trudeau and Conservative Leader Pierre Poilievre are cherry-picking numbers from the PBO report on the economic impacts of the carbon tax.

Expert Advice on Climate Change

Robson Fletcher of CBC News asked Trevor Tombe, economics professor at the University of Calgary and a research fellow at the university's School of Public Policy, if axing the carbon tax would, presumably, also axe the rebates. So, on balance, how would that shake out for Canadians?

According to the Statistics Canada model, 94 per cent of households with incomes below $50,000 receive rebates that exceed their carbon-tax costs in 2023.

Roughly half of households in this income category see a net gain of between $20 and $40 per month. About four per cent see a net gain of $70 per month or more.

At the other end of the spectrum, only about 55 per cent of households with incomes above $250,000 receive more in rebates than they pay in costs, according to the data.

Roughly half of households in this income category see somewhere between a net loss of $20 per month and a net gain of $30 per month. About five per cent see a net loss of $100 per month or more.

These high-income households stand to gain the most if the tax were axed tomorrow.

Lower-income folks who are enjoying more in rebates than carbon-tax costs, meanwhile, stand to lose the most — both in absolute dollars and, especially, as a proportion of their total income. (Fletcher, 2023)

The CBC reporter, Fletcher, notes that on the Conservative Party's "Axe The Tax" website it says the "Parliamentary Budget Officer report proves that the carbon tax will cost most households more than they ever get back." and these seemingly contradictory claims coming out of the same report have been a source of confusion. Trevor Tombe, economics professor, says they're not actually at odds; they're simply referring to two different things.

Peter Zimonjic of CBC News reports that experts say the Parliamentary Budget Officer's report on carbon pricing is important but far from definitive. Trevor Tombe, an economics professor at the University of Calgary notes that the report looks at what the cost to individuals and the economy will be in 2030, when the carbon tax rises from its current rate of $50 to $170 per tonne.

"This is one of these issues where both sides of the debate in this case are speaking to a kernel of truth, but also conveniently neglecting some other important considerations,"

The Liberal government points to the part of the report that features straight fiscal math — how much average households pay minus how much they get back in rebates. By that measure, the PBO says, most households profit. 

The Conservatives point to a part of the report based on complicated modelling that predicts the economic impact of carbon pricing across the economy on things like wages and investment income. By that measure, the PBO says, most households are out of pocket. 

Both sets of numbers show the carbon tax is progressive — those with lower incomes do better under carbon pricing than those with higher incomes. (Zimonjic, 2022)

Brett Dolter, an assistant professor of economics at the University of Regina, comments on the report of the Parliamentary Budget Officer.

The PBO's "analysis assumes that we could be richer if climate change didn't exist, which of course everyone wishes that was the world we live in. But it does exist and we have to decide how to address it," (Zimonjic, 2022)

Dolter adds that we do not have a direct comparison with another proposed federal emissions reduction policy, and economists say that all the evidence so far leads to the conclusion that carbon pricing is cheaper than emission reduction programs that rely on incentives or regulations.

"Generally when economists look at policy pathways, regulation is more costly than carbon pricing, carbon pricing is generally thought of as the most efficient option, the one that's going to cause the least amount of drag on the economy," (Zimonjic, 2022)

All emission reductions policies have a cost and Tombe said the challenge with a carbon tax is that the cost is up front, which can make it hard to sell. But there is also a cost to doing nothing, he added.

"For the government ignoring the costs, that is unfortunate, and for the Conservatives ignoring the benefits is equally unfortunate. Both exist and they should be compared." (Zimonjic, 2022)

As we seek the best plan for Canada to reduce the emissions that cause climate change, we need the detailed analysis of experts even as political posturing tends to cherry pick the information most compatible with their messages to the public.

References

Fletcher, R. (2023, November 8). If Canada axed its carbon tax — and rebates — this is how different households would gain or lose. CBC. Retrieved December 5, 2023, from https://www.cbc.ca/news/canada/calgary/axe-the-tax-and-carbon-rebate-how-canada-households-affected-1.7046905 

Zimonjic, P. (2022, October 23). What the Liberals and Conservatives get right — and wrong — about the carbon tax. CBC. Retrieved December 5, 2023, from https://www.cbc.ca/news/politics/house-of-commons-pbo-report-carbon-tax-1.6625612 

When the Market fails

We are more keenly aware of homelessness and food insecurity in our community when the days grow short and the temperature drops prior to the holiday season. We are fortunate to have many people who work very hard supporting the homeless and gathering food for food banks and soup kitchens.

Tents are not suitable in Winter

Some propose redistribution of existing resources by providing money to the people who are unable to afford housing and/or food. This redistribution is traditionally and optimally done through Government action in taxation.

Working to Feed the Hungry

A report by Lyndsay Armstrong, of The Canadian Press, in the Globe and Mail declares that the Nova Scotia housing crunch is a once in a generation challenge.

Duncan Williams, president and CEO of the Construction Association of Nova Scotia, comments that Nova Scotia's housing shortage is a generational challenge that must be met with effort similar to what was needed to rebuild after the Halifax explosion.

Expected to be lacking 41,200 homes by 2028 -- and with the pressures of inflation, high interest rates and labour shortages -- the province needs to take immediate action,

Nova Scotia's current housing needs, he said in a recent interview, are similar to the province's situation after the Second World War, which resulted in a period of major urban development in Halifax that extended into the 1960s.

Built After WWII

 

"We've done this before. We just need to go back and dust off some of the history for how it got done."

Williams says he's looking overseas for help. Last week, he returned from a recruiting trip in London, England, where he shared job details with professionals with experience in "anywhere from drywall, to carpentry, to finish carpentry and pretty much anything in between." (Armstrong, 2023)

Klein, Seth. (2020) A Good War: Mobilizing Canada for the Climate Emergency. Toronto, ON:ECW Press.

Mohammed El Sherif, project manager of Halifax-based construction company Savvy Homes Construction Ltd. said in a recent interview that next to challenges with labour, the rising costs of all aspects of home building is a top concern.

"The price of material and land has had a major impact and the construction insurance is also getting expensive. Those rising costs are reflected in the price of housing, he said, adding that they also limit the number of projects the company takes on.

"Sometimes we find the land, but then we do our math and if it's going to get too expensive by the time we finish constructing the house, then it's less appealing to a buyer," making the project unviable, he said. (Armstrong, 2023)

The Office of the Federal Housing Advocate, housed at the Canadian Human Rights Commission, helps to promote and protect the right to housing in Canada, including the progressive realization of the right to adequate housing. The goal of the Advocate’s work is to drive change on key systemic housing issues and advance the right to housing for all in Canada. An engagement report, Reclaiming the National Housing Strategy, shares what was heard. 

Aditya Rao, Senior Research Officer with the Canadian Union of Public Employees (CUPE) National, commented that Canada has a National Housing Strategy but needs a National Right to Housing Strategy.

The National Housing Strategy is not even meeting its own affordability criteria. Conventional wisdom right now is that demand for housing is outpacing supply, but not all supply is good supply. Significant problems with the definitions being used for what is considered affordable housing.  A right to housing approach would require affordability measures to be tied to incomes, not the market. We can't use the market to solve problems that the market is creating.

The rent cap in New Brunswick is expiring this year and tenants are being hit with significant rent increases. There is growing consensus that the biggest threat to housing affordability is the financialization of housing. Some consider it a normal feature of the rental market – this idea of charging rents “as much as the market can bear.” Housing is a basic need - people will even choose to go hungry and sacrifice on medications, rather than lose their home. People with disabilities are applying for medical assistance in dying so that they don't have to face homelessness. Non-profit and co-operative housing provide long term guaranteed affordability We already have proven solutions: 

• Use public money in the public interest, non-profit and cooperative housing
• Create national guidelines for provinces on minimum standards for tenant protections
• Use federal spending powers to require provincial legislative compliance

It is not enough to legislate the right to adequate housing federally if you can have wildly different experiences with your housing situation depending on where you live (What We Heard Report - Reclaiming the National Housing Strategy, 2023)

Gordon Laird, 2003/2004 Media Fellow at the Sheldon Chumir Foundation for Ethics in Leadership began his field work on shelter in Iqaluit, February 2001, and ended in Calgary, June 2007. In his report Homelessness in a growth economy: Canada’s 21st century paradox, one of his key action points is labelled Housing First.

In the past, paternalistic attitudes towards low income and homeless people assumed that candidates for income assistance and affordable housing needed to improve themselves and exhibit middle class characteristics before housing was granted. Housing First, properly applied, assumes that housing is a prerequisite to economic, social and personal well-being. Therefore, shelter – independent, social, supportive – comes first in any successful recovery from homelessness. In the immediate future, Canada must deploy a crisis reduction strategy to reduce the number of core long-term homeless people, who require the majority of resources; and second, enact preventative measures to keep a growing population of at-risk Canadians from becoming homeless. While addictions and mental health are common concerns among the homeless, poverty is the leading cause of today’s homelessness and housing affordability crisis. Canada’s “new homeless” are families, women, new Canadians, students and children – a broad demographic whose common trait is poverty. Canada should immediately recognize this fact with targeted income supplements, rent subsidies, transitional housing and social housing should be deployed to improve housing security. Finally, Canada should pioneer new ways to restore baseline income security to Canadians, especially those at greatest risk for experiencing affordability problems. (Laird, 2007)

Adequate Housing

Kevin Yarr of CBC News quotes Jane Ledwell, a member of the P.E.I. Working Group for a Livable Income, as said in a news release.

"This report establishes beyond doubt that a province-wide guaranteed basic income in P.E.I. is feasible and realistic,"

The detailed report on guaranteed basic income says it would mean 65 per cent fewer P.E.I. children would be living in poverty, along with 90 per cent fewer people who live alone — and poverty could be virtually eliminated for people with disabilities.

But Island children currently living in poverty would see big benefits, the report argues, with the poverty rate falling from 9.0 per cent to 3.1 per cent. The poverty rate for people living alone would drop from 27 per cent to three per cent. Overall, the poverty rate would fall from 10 per cent to two per cent.

The report outlines paying for the provincial share through higher taxes, aimed in particular at higher-income earners.

The provincial sales tax would go up one percentage point, with an offsetting increase in the HST rebate for lower-income earners. This would increase provincial revenues by an estimated $28.5 million.

The top marginal income tax rate would increase from 16.7 to 19.4 per cent, raising another $21.4 million.

The reports' authors believe the plan would mean a savings of $17.4 million as social services spending goes down.

For middle-income earners, the report estimates the tax cost at a few hundred dollars a year. For top earners, the increase quickly rises to close to $2,000. Those top earners would pay for close to half of the program.

A guaranteed basic income would have benefits for the province that are difficult to quantify, the report says. In general, it says, better living conditions would lead to better long-term outcomes in health, education, housing, community involvement and other areas. (Yarr, 2023)

Eric Stober of Global News reports that the wealth gap between the rich and poor in Canada widened at the fastest pace on record in the first quarter of 2023 compared with the year before, according to Statistics Canada, amid high inflation and declining real estate values.

The top 20 percent of earners in Canada held 67.8 per cent of the country’s net worth in the first quarter, compared with the bottom 40 per cent holding 2.7 per cent. The difference between those amounts equals the wealth gap.

“Most wealth is held by relatively few households in Canada,” Statistics Canada said in its report released in July 2023. (Stober, 2023)

Wealth Distribution Canada 2023

One of the many stories about top Canadian, TC “Tommy” Douglas, is set in Regina just before he was to begin “medicare” in Saskatchewan. One of his staff asked him: “But Tommy, where are we going to get the money?” Premier Douglas reportedly responded “From them that has it!”

Perhaps, simply put, the answer to homelessness is to build more homes and the answer to poverty is access to more money. In Canada, the Government has responded, in the past, to housing needs by rapidly building houses. Rent subsidies and a guaranteed basic income are examples of Government providing money to improve the life situation of citizens. When the market fails, the Government must step up.

References

Armstrong, L. (2023, November 28). Nova Scotia housing crunch must be treated as 'once-in-a-generation challenge', industry says. The Globe and Mail. Retrieved December 2, 2023, from https://www.theglobeandmail.com/canada/article-nova-scotia-housing-crunch-must-be-treated-as-once-in-a-generation/ 

Laird, G. (n.d.). Shelter - Homelessness in a growth economy. The Homeless Hub. Retrieved December 2, 2023, from https://www.homelesshub.ca/sites/default/files/Shelter07_study.pdf 

Stober, E. (2023, July 4). Wealth gap between rich and poor widens at fastest pace on record in Canada - National | Globalnews.ca. Global News. Retrieved December 2, 2023, from https://globalnews.ca/news/9809757/wealth-gap-canada-first-quarter-2023/ 

What we heard report - Reclaiming the National Housing Strategy. (2023, February 7). Federal Housing Advocate. Retrieved December 2, 2023, from https://www.housingchrc.ca/en/publications/what-we-heard-report-reclaiming-national-housing-strategy 

Yarr, K. (2023, November 22). Guaranteed basic income could cut poverty on P.E.I. by 80%: report. CBC. Retrieved December 2, 2023, from https://www.cbc.ca/news/canada/prince-edward-island/pei-guaranteed-basic-income-report-1.7036102 

Insecurity and the Economy

Our community is experiencing severe housing and food insecurity. The increasing numbers of people living in tents and depending on food banks indicates that action by the government is essential and urgent.

Homeless in the Ball Park

 

The 2023 CBC Massey Lectures, The Age of Insecurity, feature filmmaker and writer Astra Taylor who explains how society runs on insecurity and how we can change it. The lectures are also available as a book, The Age of Insecurity: Coming Together as Things Fall Apart, from House of Anansi Press.

Taylor takes a deep dive into the history of capitalism and explores how, paradoxically, the ways that we’ve been encouraged to achieve security — purchasing health and wellness products, buying life insurance, acquiring property — actually work against us.

She also looks forward at the ways we might be able to achieve true security, using collective action. 

But today, we also live in an era of manufactured insecurity, imposed on us from above. Consumer society, Taylor argues, capitalizes on the very insecurities it produces, making us all insecure by design.

How we understand and respond to insecurity is one of the most urgent questions of our moment — nothing less than the future security of our species hangs in the balance. (Taylor, 2023)

Agnieszka K. Wielgosz serves as a vocal sustainability/ regenerative wellness advocate. She is the woman behind CEI Collective, serving the creative needs of wellness professionals, regenerative & green living brands to grow and make a dynamic impact.

When we consider the phenomenal speed at which the USA ramped up industrial production during the Second World War, or the efficiency with which developed nations are able to respond to natural disasters, we see that notions of “money” and “the economy” quickly fall by the wayside.

If only we allocated the same amount of resources and effort into the health of our global community!

It’s a well established fact that modern societies with advanced levels of technology could easily provide all the resources required for their citizens to live in ample comfort and safety, without having to resort to money, credit, bartering or worst of all, debt.

With shared responsibility and co-owned resources, humanity would quickly overcome the artificial boundaries that currently separate us, leaving us free to pursue a better way of living whilst caring for our shared environment. (Wielgosz, 2020)

A report by Lars Osberg tracks Canadian income inequality through 75 years of growth and recessions and speculates about the post-COVID-19 future. 

Although the Keynesian consensus on the importance of full employment to balanced growth and social stability enabled growing real wages and stable inequality, it was replaced, after a surge in inflation in the 1970s, by Neo-Liberal policies that emphasized budget balance and low inflation. But slowing growth and the concentration of income gains at the top produced widening income gaps, increasing discontent and political instability—even before COVID-19 hit. In the post-COVID-19 era, the Green New Deal emphasizes social and environmental sustainability, and is reflective of the economic policy changes that likely lie ahead. This report has contrasted the balanced growth and stable inequality of the Keynesian consensus era, 1946–1980, with the unbalanced growth and increasing top-end income shares of the Neo-Liberal years that followed. It has also contrasted the policy choice facing both past regimes—how to share the gains from growth—with the possibility that a post-COVID-19 world will be dominated by a more depressing choice: how to allocate the costs of contraction. As always, future policy choices will be conditioned on prior experiences. The era of Keynesian consensus decision-making saw full employment and the sharing of the gains from economic growth as central issues because that generation had experienced the costs of social instability. And although they could not solve the problem of inflation, they left a social insurance system and a history of stable inequality to their Neo-Liberal successors, which muffled initial discontent with the high unemployment, stagnant middle-class wages and increasing inequality of Neo-Liberalism. Neo-Liberalism solved the inflation problem but could not produce a fair distribution of the gains from economic growth—and that matters. When social insurance protections are dismantled and top-end incomes grow faster than middle-class incomes, inequality and insecurity increase over time. So the legacy of Neo-Liberalism includes the populist political reaction of those who were left behind in the Neo-Liberal decades and those who were, and will be the casualties of the COVID-19 years. The legacy of Neo-Liberalism also includes a global climate crisis. Those failures of Neo-Liberalism will condition Canada’s responses to the challenges of the post-COVID-19 world. (Osberg, 2021)

Prior to the Keynesian consensus era, 1946–1980, Crown Corporations, including Wartime Housing Limited built thousands of homes in Canada.

Klein, Seth. (2020) A Good War: Mobilizing Canada for the Climate Emergency. Toronto, ON:ECW Press.

Wartime Housing in Halifax

 

The abstract from the Masters Dissertation of Jill Wade (1984) entitled Wartime Housing Limited, 1941-1947 : an overview and evaluation of Canada’s first national housing corporation asks the question of why did the federal government not reconstitute WHL as a permanent, low-rental housing agency.

Between 1941 and 1947, a federal crown corporation called Wartime Housing Limited (WHL) successfully built and managed thousands of rental units for war workers and veterans. At the same time, an Advisory Committee on Reconstruction study (the Curtis report) described the enormous need for low and moderate income shelter throughout Canada and recommended a national, comprehensive, and planned housing program emphasizing low-rental housing. Instead, in 1944 - 1945, the federal government initiated a post-war program promoting home ownership and private enterprise; it neglected long-range planning and low income housing. Thus, an interesting question arises. Why did the federal government not reconstitute WHL as a permanent, low-rental housing agency (Wade, n.d.)

The evidence of stagnant middle-class wages and increasing inequality is seen in the growing numbers of homeless people and the increasing importance of food banks and soup kitchens in our community.

Feed Nova Scotia essential for food security

The role of the government to protect the health of Canadians was essential during the Covid 19 emergency. Government Action, similar to wartime programs, to guarantee the right of Canadians to adequate housing and access to healthy food is urgently required now.

References

Klein, Seth. (2020) A Good War: Mobilizing Canada for the Climate Emergency. Toronto, ON:ECW Press.

 

Osberg, L. (2021, March 2). From Keynesian Consensus to Neo-Liberalism to the Green New Deal. | Canadian Centre for Policy Alternatives. Retrieved November 21, 2023, from https://policyalternatives.ca/publications/reports/75-years-of-income-inequality-canada 

Taylor, A. (2023, June 16). The Age of Insecurity. 2023 CBC Massey Lectures. Retrieved November 21, 2023, from https://www.cbc.ca/radiointeractives/ideas/2023-cbc-massey-lectures-astra-taylor/lecture-1-curas-gift 

Wade, J. (n.d.). Wartime Housing Limited, 1941-1947 : an overview and evaluation of Canada's first national housing corporation. Open Collections. Retrieved November 21, 2023, from https://open.library.ubc.ca/soa/cIRcle/collections/ubctheses/831/items/1.0096317 

Wielgosz, A. K. (2020, October 20). A New World is Possible: An Introduction to Resource-Based Economies. Agnieszka K. Wielgosz. Retrieved November 21, 2023, from https://agnes-wielgosz.medium.com/a-new-world-is-possible-an-introduction-to-resource-based-economies-5def63e87e2a