Economist David Vardy, in his Aug. 11th letter to the editor (“Was Muskrat Falls a prudent investment?”), outlines what he believes to be the best way to deal with the Muskrat Falls cost quandary (keep rates “prudently” low by shifting rate setting responsibility to the PUB and cover the shortfall through our “progressive” tax system).
I would, however, suggest that the problem is more than just who should determine what our electricity rates should be and what share of the Muskrat costs should taxpayers (rather than ratepayers) pay.
While Mr. Vardy states that a “... (rate) increase of 50 per cent will have an enormous impact on low-income people,” he fails to point out that a substantial portion of homeowners (approximately 30 per cent or more), because they rely on wood stoves and oil-fired furnaces to heat their homes, are now (effectively) protected from the kind of large, massive dollar-value increase that the same 50 per cent increase will have on homeowners who rely on electric baseboard heat.
The more that electricity rates are lowered (and costs recovered/shifted from ratepayers to taxpayers), the more high-paid, two-income large homeowners and businesses will see their massive, dollar-value electricity cost increases reduced. Those cost increases will be shifted and recovered from taxpayers, including many of those “low-income people” who do not use electricity to heat their homes (they will be bombarded with increased taxes on fuel oil, gasoline, insurance, food, vehicle registration fees, levies etc., as well as reduced services such as health care, education, roads, etc.).
Do anyone really think that our “progressive” tax system will prevent the wealthiest (heaviest electricity users) from finding ways to avoid paying such taxes?
Nothing in Mr. Vardy’s “better solution” recognizes the reality that it was the previous (Harper) and existing (Trudeau) federal governments, the Nova Scotia government and Emera that were the “enablers” of this Muskrat Falls boondoggle.
While they are (along with the banks), and will be for the life of this project, the principal beneficiaries, we quibble over which pocket only N.L. ratepayers/taxpayers will pay from.
If we have been improperly, unethically, illegally (or fraudulently) locked into this fiasco, what is being done to analyze and to get us out of this mess?
Everyone should take a deep breath before jumping on PlanetNL and Mr. Vardy’s insufficiently thought out suggestion.
The province’s financial difficulties (although in large part due to this Muskrat Falls boondoggle) are now much greater than just electricity rates alone (and therefore are now well beyond the sole responsibility and expertise of the PUB — a “utilities” regulator).
Effectively shifting the burden of Muskrat Falls from ratepayers to taxpayers in no way ensures that the highest income earners/wealthiest segment of society will pay a much greater share of Muskrat Falls’ debt obligations.
As a political principle, should the quandary that we now find ourselves in be all but shifted to non-elected, non-accountable political appointees/bureaucrats?
At least we can vote our MHAs out of office.
Too much reliance on low rates/provincial taxation will help keep N.L. in the dinosaur age.
We (and the federal government) should be fostering and carefully guiding citizens toward a new high-tech, decentralized and efficiency oriented energy paradigm.
Where is the benefit/cost analyses of not operating the most costly (generation component) of this Muskrat Falls boondoggle (and thus eliminating the mega/multi-million-dollar annual operating costs)?
"While there is no silver bullet, and while there is much navel-gazing focused on the N.L. tax/ratepayer bearing the full brunt of this carefully crafted fiasco, there is no evidence that our federal representatives, our provincial government and our brightest minds are otherwise putting up a fight."
Who is holding the federal, the Nova Scotia governments, and Emera to account?
Maurice E. Adams