The NS legislature reopened this week, but the NS NDP has already been busy following through on some of its election promises. One of these was to institute an energy tax rebate making life more affordable for families. But does it?
In an interview about the energy tax rebate, Premier Darrell Dexter suggested that this was important because ‘the necessities of life should not be taxed.'
Electricity costs are indeed a necessity, but whether basic necessities are taxed is beside the point. The point really is whether basic necessities are available and accessible to all who need them.
According to the government, an 8% rebate on residential power bills will amount to saving an average of $10 per month. This is not a significant saving for those who are struggling to pay their bills.
It is, however, a significant loss of revenue to the government of approximately $15 million this year and $30 million next year. Should energy costs continue to increase, as they have, by about 9.5% on average per year, this program could cost the government more than it is projecting and barely offset electricity cost increases for the consumer.
A better program would be targeted to those who need help the most, such as a guarantee of the cost of electricity via a subsidy to ensure it remains affordable.
In contrast, an across the board energy rebate also benefits those who are not struggling to pay their bills; those who have high energy costs because they choose to own large homes, for example. This program will also benefit landlords who may or may not pass on savings to their tenants.
While this program will not likely result in an increased consumption of unnecessary electricity, there is also a risk that without sufficient energy reduction programs, this incentive will increase greenhouse gas emissions. The $1 million investment in the proposed energy retrofit (1,000 home insulation grants) pales in comparison to this program.
As it stands, the government's new program raises more questions than it answers, or solves.
Where does this program leave those who are most vulnerable to the sudden increases in the costs of energy? Where does it leave those who are struggling to secure the other basic necessities?
The best use of limited government resources is to begin to address the fundamental problems at the root of high electricity costs and some people's inability to pay their bills. We need, for example, investments in energy efficiencies and the aging housing stock - Nova Scotia has one of the oldest housing stocks in the country. Ultimately, as has been previously pointed out by the CCPA-NS, we need our province to be more energy secure and not so reliant on imported energy supplies.
We also need investments in poverty reduction so that low-income people are not being forced to choose which of the necessities of life they can afford this month. Finally, we need to have meaningful discussion about our tax system and about who should pay how much and for what. Tinkering with a regressive system by offering tax rebates only exacerbates the inequities. Let's stop tinkering and make some bold policy choices that will be in the best interest of all Nova Scotians.