Good news for the Green Shift from the Canadian Taxpayer's Federation

The Canadian Taxpayer's Federation (CTF) released yesterday a "Green Shift impact analysis for Ontario Businesses". They said that new costs of $1.5 billion per year would be paid by 111 power plants and that tax cuts of $811 million would be shared by 365,649 Ontario businesses.

Why is this good news for the Green Shift?

If you look a little more carefully than they did at their own figures, you'll see that about three quarters of the extra tax paid is accounted for by the four coal burning power plants of Ontario Pwer Generation, owned by the people of Ontario.

But the McGuinty government's plan is to phase out these coal plants! A lot of the slack will be taken up by conservation and renewable energy. The Green Shift contains business tax breaks for using green technologies (accelerated depreciation) and a 25% refundable science, research and experimental development credit.

Furthermore, Ontario Power Generation's take of the federal income tax cut would be insignificant (OPG's annual report for 2007 shows income before taxes of $477M and $576M for 2007 and 2006 respectively) compared to all the businesses operating in the province.

So, very roughly but not so much more rough than the Canadian Taxpayer Federation analysis I would say, after the coal plants are shut down (or stop burning coal - there are plans to use biomass to fuel them) the carbon tax paid by the companies than own Ontario power plants would be about $380M while the business tax cuts would still be about $800M (and this economic stimulus does not include the stimulus from developing the green energy sector).

It is interesting to note that while publically owned Ontario Power Generation's plants occupy positions 1,2,4,5,6 on CTF's top greenhouse gas producers list, position 3 is occupied by a plant owned by TransAlta Corp., an Alberta company; position 7 is occupied by Exxon Mobil, the US based corporation; and in position 8, ATCO, is an Alberta company. So some of the private businesses the CTF is shedding tears for aren't even Ontario based businesses.