Punishment Without Mercy
The Saturday Huddle is a weekly column that features opinion, analysis, and reflections on Huddle stories, podcasts, and business news in the region. Derek Montague is a Huddle reporter based in Halifax.
There is a historic saying that there can be no taxation without representation. Given that taxes are inevitable, no matter what kind of regime we live under I’m not sure how well that saying has aged. But when it comes to taxes, and financial burden in general, I prefer another motto: there should be no punishment without mercy.
Yes, we all know taxes are (supposed to be) used for the common good. But when taxes go up, it does feel like the government is punishing us. But, in our democracy, we usually have faith that there will be mercy down the road to relieve the pain.
If you live in Nova Scotia, you’d be forgiven if your faith is being tested.
In this province, we have taken it all on the chin. The increased interest rates, the ridiculous food prices, the impossible housing crisis, the never-ending inflation. And yes, these are issues across the country. But Nova Scotians (and Atlantic Canadians in general) make much lower wages, historically, than the bigger provinces in central and western Canada.
Now, at a time when we would normally be expecting the mercy to level out the pain, government instead brings out the salt. For, as you are reading this dear friends and neighbours, we are merely a week away from the needless pain of a carbon tax.
I realize the carbon tax (or a similar system) is mandated for all provinces. But Nova Scotia will be among the hardest hit of any province. On Canada Day (oh, the irony) the price at the pumps will go up 12 cents per litre as the federal government’s carbon tax takes effect, replacing the province’s old cap-and-trade system.
Even if you don’t drive, the trickledown effect will be obvious. Despite our efforts to stop the reliance on fossil fuels, it is still the combustion engine that runs our economy. Until delivery trucks become electric, it will affect our food prices. Again.
And until Halifax replaces all of its buses with an electric fleet, it will either mean higher fares, or taxpayers having to take on a bigger subsidy. It is estimated that the average Nova Scotian family will pay an extra $431 per year (after government rebates).
The problem with rebates, however, is you need enough money in your pockets to get you by while waiting for the cheque in the mail. Given how tight people’s budgets are these days, that could really be a struggle for many. I hope your daily commute isn’t very far.
Once again, it’s hard to stomach that our elected officials continue to drop the ball when it comes to the cost-of-living crisis. I have been outspoken about how the federal and provincial governments have done nothing in the past to make life, especially food, more affordable.
The carbon tax is so enraging because government is actively making things worse at a time when we should be expecting solutions.
Instead, we get finger pointing about which government to blame. Some say Tim Houston and company in Nova Scotia failed to come up with a carbon-taxing system that the feds would approve of. After all, everyone across Canada knew this was coming. If provinces didn’t create their own plans to put a price on carbon, the federal system would be imposed.
On the other hand, one could argue there was no need for Ottawa to get so heavy-handed with us. Nova Scotia has reduced emissions by 36 per cent since 2005. You could argue what we are doing is working. On top of that, there is evidence that some provinces are being treated more favourably than others. Check out this quote from the Hamilton Spectator in 2022.
“Nova Scotia has reduced its emissions by 36 per cent since 2005, Quebec only by 12 per cent. But Ottawa isn’t letting Nova Scotia off. Beginning next year, Nova Scotians will have to pay the higher federal tax, too — though Quebec gets to keep its system.”
No matter who is to blame, it’s shameful that elected officials at two levels of government have failed to soften the blow for Nova Scotians on this matter.
Other than petty political squabbling, it’s hard to imagine why the two sides couldn’t bang out a deal. But since this is Ottawa’s plan, I’m putting the majority of the blame on the feds. They could have made the reasonable decision to briefly delay the carbon tax until something was worked out. Instead, they chose to give this province a sour Canada Day gift.
This news is especially bad for small business owners. On top of facing increased energy costs this year, there’s the matter of those pesky CEBA loans. Full payment is due by the end of 2023. Failure to do so will disqualify businesses from the forgivable portion of the loan. It will also start collecting interest.
Few businesses have been able to afford to pay it off. Small businesses are still struggling to get back to 2019 levels of sales, especially with the ever-increasing costs of doing business.
This is where we would expect that mercy from government. The CEBA deadline has been extended before when it became clear businesses needed more time. Another extension seems like the easiest choice to make. But there is no mercy coming.
In recent articles, government spokespeople showed no signs an extension is coming. Meanwhile, the CFIB estimates 250,000 businesses across Canada are at risk of closing over these loans.
Remember, folks, these are small businesses. As the economic dominoes continue to fall from the pandemic years, it’s clear the pressure is being put on those who can least afford it.
If the federal or provincial government has any policy up its sleeve to provide some financial relief for people, it best present it at the next House sitting. We could really use that mercy portion of our unspoken agreement.