Leap for Real
How Can Canada Afford the Leap?
By Bruce Campbell, Seth Klein and Marc Lee
The following is extracted from the Leap manifesto's website.
We can afford to make this Leap. All that is lacking is the political will and determination.
The manifesto itself offers a short summary of the options at hand to finance this grand shift in our economy:
"The money we need to pay for this great transformation is available – we just need the right policies to release it. Like an end to fossil fuel subsidies. Financial transaction taxes. Increased resource royalties. Higher income taxes on corporations and wealthy people. A progressive carbon tax. Cuts to military spending. All of these are based on a simple "polluter pays" principle and hold enormous promise.
One thing is clear: public scarcity in times of unprecedented private wealth is a manufactured crisis, designed to extinguish our dreams before they have a chance to be born".
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Successive federal governments, over the last 15 years have imposed tax cuts (disproportionately benefiting the wealthy), which have depleted the federal treasury's capacity to spend and invest by $50 billion in 2014 alone (and provincial tax cuts over 20 years have had a similar effect.) Thus the "imperative" for austerity measures in recent years should be understood as manufactured.
The Alternative Federal Budget as produced by the Canadian Center for Policy Alternatives (CCPA) can be found here: (https://www.policyalternatives.ca/publications/reports/alternative-federal-budget-2015) – Ed.
But to highlight a few options[drawn from the Alternative Federal Budget as produced by the Canadian Centre for Policy Alternatives]:
Ending subsidies to the fossil fuel industry would recoup about $350 million a year for the federal government (and more if provincial governments do likewise).
A national financial transaction tax could raise $5 billion a year.
Ending special tax treatment for capital gains income would recoup $7.5 billion a year (and more for provincial governments).
Returning the corporate tax rate to where it was in 2006 would raise $6 billion a year.
Tackling tax havens would recoup $2 billion a year.
A new federal upper-income tax bracket on incomes over $250,000 could raise about $3.5 billion a year.
Scaling military spending back to pre-911 levels would save $1-$1.5 billion a year.
Eliminating the recent income splitting and other family-with-children tax cuts would recoup $7 billion a year.
And a national carbon tax of a mere $30/tonne (the same level as BC's current carbon tax) would raise $16 billion a year.
The carbon tax option deserves special attention, given its unique potential in facilitating The Leap by driving new green investment by both public and private sectors. We would argue that, over time, the tax should in fact be higher than $30 per tonne. Marc Lee, in his CCPA Climate Justice Project report, "Fair and Effective Carbon Pricing," has modeled a BC carbon tax that rises incrementally to $200 a tonne.
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A national carbon tax at $200/tonne would raise approximately $80 billion a year.
Bruce Campbell is Executive Director of the Canadian Centre for Policy Alternatives. Seth Klein is the CCPA's British Columbia Director. Marc Lee is a Senior Economist with the CCPA, and Director of the centre's Climate Justice Project.