Angry in the Great White North

Prime Minister Stephen Harper says a Conservative government will lower diesel taxes:

Harper, speaking in Winnipeg, said the reduction was "modest, affordable and responds to real needs."

He said the impact will be broad and help reduce the cost of consumer goods and groceries.

"The purpose of this announcement is clear, at a time when Canadians are concerned about affordability and energy prices are rising we should do what we can to lower prices," said Harper.

"This tax reduction will benefit consumers who buy virtually anything that moves by truck, train, ship or plane."

The savings will cost the federal treasury about $600 million annually.

All people who use diesel fuel -- truckers, farmers, fishermen, and so on -- will benefit, as will anyone who depends on goods that we get from these people.

Which is everyone.

And like any tax cut, the savings are not tied to a specific program or subsidy.  People who save money can use the savings any way they like.

Liberal Party leader Stephane Dion is against the idea of lowering diesel taxes, because he wants to control what is done with the money:

Prime Minister Stephen Harper’s announcement that he will cut the excise tax on diesel is a 19th century approach to the challenges of the 21st century green economy, Liberal Leader Stéphane Dion said today.

“This is just a gimmick that will make no real difference for Canadians, while actually undermining the country’s ability to switch to cleaner renewable sources of energy,” said Mr. Dion. “When it comes to facing the challenge of the climate change crisis, Mr. Harper is going in the opposite direction from the international community and every responsible leader.

Stephane Dion's plan is to raise taxes on diesel fuel, increasing the cost of everything, then dole out government revenue as a subsidy for those who are able to show they can run their trucks and tractors and such without emitting greenhouse gases.

If you can, you get money to offset your cost to switch.  If not, too bad.

Apparently, the Canadian Trucking Alliance prefers the approach offered by the Conservatives:

The Canadian Trucking Alliance (CTA) has been a vocal critic of the Liberal Green Shift plan, and the federal excise tax on diesel in general. The tax generates over $1 billion per year. Harper's proposal would represent a tax cut of $600 million per year on diesel, the Conservatives claimed. Meanwhile, the CTA has said the Liberal Green Shift plan would increase the cost of operating a truck by $1,700 per year.

The announcement quickly drew praise from the CTA.

"Excise taxes on business inputs are an archaic and regressive form of taxation that should have been repealed or reformed back when the GST was introduced," CTA CEO David Bradley said. "It's taken a long time, but finally someone is listening."

He added the change would bring "modest" help to truckers while lessening the "upward pressure on the price" of consumer goods.

"A two cent per litre reduction in the excise tax will not solve all our problems but it would be an important step in the right direction," said Bradley, adding it could result in a fuel savings of $1,600-$1,800 per truck per year. Industry-wide fuel tax savings could amount to $140 million, according to the CTA.

The Liberals sure love their taxes.