Any ‘response’ to inflation that doesn’t include the removal of the carbon tax and a move towards pro-energy sector policies isn’t a serious response.
Inflation continues to surge, as the cost-of-living crisis in Canada deepens.
As reported by BNN Bloomberg, “Annual inflation rose to 6.7 per cent last month, up from 5.7 per cent in February, Statistics Canada reported Wednesday in Ottawa. That’s the highest since January 1991 and exceeds the median estimate of 6.1 per cent in a Bloomberg survey of economists.”
And once again, the Bank of Canada appears caught off guard:
“The report shows inflation pressures that are more elevated than the central bank estimated just last week, reinforcing pressure on policymakers led by Governor Tiff Macklem to withdraw stimulus from an overheating economy. Investors see strong probability of a second half-percentage point increase at its next meeting, after officials delivered a jumbo hike last week.”
Bank of Canada miscalculations aside, it is clear that inflation isn’t going anywhere.
While inflation has been exacerbated by world events – particularly Russia’s invasion of Ukraine, sanctions, and supply chain issues stemming from China’s draconian lockdowns – the cost-of-living was surging in Canada before all of that took place.
The carbon tax is an inflationary policy
The Liberal government and much of their supportive media often ignore or downplay that the carbon tax is a policy deliberately designed to increase inflation.
The government has decreed that prices must go up to reduce consumption, and that is what the carbon tax does.
Consider that the Bank of Canada admitted the carbon tax has increased the rate of inflation by 0.4%. Assuming that we can trust the Bank of Canada figure (I would bet the impact of the carbon tax on inflation is much higher), that is still a significant increase in the cost-of-living at a time when so many Canadians are struggling.
And that’s with the carbon tax at $50 a tonne. By 2030 – if not repealed by a Conservative Prime Minister – it will hit $170 a tonne.
Since it goes up every year by $15 a tonne, the carbon tax is a policy that makes inflation inevitable.
And in a country like Canada, where it’s often cold and where we often have to travel large distances, the carbon tax is doubly-damaging.
The latest inflation report shows gas prices are going through the roof – of course we don’t need an official report to confirm what we see all around us:
Month-over-month, gas prices surged 12%.
And compared to this time last year, gas prices are up a whopping 40%.
Food prices are up 7.7%, and prices at grocery stores are up 8.7% year-over-year.
Since a significant portion of food prices are related to transportation costs, the carbon tax pushes up food-price inflation.
Additionally, the carbon tax has a significantly negative impact on farmers across the nation, further driving up food prices.
The carbon tax is the type of policy thought up by out-of-touch elites, who often act as if they think food comes from the grocery story and ignore the fact that higher energy costs ripple out in a damaging way throughout the entire economy.
Sure, politicians like Justin Trudeau or Jean Charest don’t really feel the impact of rising prices and are thus fine with imposing the carbon tax, but most Canadians are unable to easily sidestep the damage caused by the cost-of-living crisis.
We need cheap & abundant energy
Take a look at this chart:
As you can see, there is a clear correlation between energy usage and life expectancy.
Indeed, many consider the true measure of a civilization’s advancement to be what percentage of available energy it can make use of.
It’s no coincidence that the countries with the highest per-capita energy use also have higher per-capita GDP, are more technologically advanced, and have a higher standard-of-living.
Intuitively, it makes sense.
Without cheap and abundant energy, advanced civilization is not possible. To continue to raise our standard of living and live longer and better lives, we need more cheap and abundant energy.
Over time, we also become more efficient in our use of energy. We can utilize more energy with less effort. And this is indeed the case in the Canadian energy sector, where efficiency has consistently improved, and where workers rights and environmental protections are placed at a higher level of importance than in other energy producers like Russia and Saudi Arabia.
Proponents of the carbon tax ignore this reality. And, by weakening Canada’s energy sector, they are weakening the foundation of our wealth and prosperity.
Higher energy costs = more poverty
If energy is more expensive, everything is more expensive.
As beings which require a constant infusion of energy to survive and thrive, our societies function the same way.
Even ‘intangible’ industries require massive amounts of tangible energy.
Just consider the amount of electricity used by all the computers and electronic devices we utilize.
Even as our economy becomes more automated, energy demands will remain high.
The key then is to realize that we should be doing everything possible to make energy affordable.
If we can expand our access to cheap and abundant energy, the cost-of-living crisis will disappear.
And there are clear steps we can take in that direction.
First, repeal the carbon tax.
Second, repeal anti-energy industry legislation.
Third, incentivize the expansion of the Canadian energy sector through lower taxes and streamlined regulations.
Those three things wouldn’t be enough on their own to bring down inflation to normal levels, but they would play a huge role.
Without the carbon tax, and with more abundant cheap energy, transportation and travel costs would decline. That would bring down food prices, and help lower gas prices. Home heating costs would decline. Canadians would utilize more energy at a lower costs, which – as history shows – would raise our standard of living.
This should be the goal of our governments, to ensure Canadians are becoming richer and richer on a per capita basis, and to ensure that we have access to abundant sources of cheap energy.
Any politician or political party that ignores this reality while claiming to be concerned about the cost-of-living lacks credibility.
Photo – YouTube
Unlike CBC and much of the establishment media who are now beholden to the government, I rely upon voluntary contributions. If you value my perspective, you can show your support by making a contribution through PayPal, or directly through Stripe below. Your support is always appreciated.