If U.S. President Joe Biden is successful in his bid to pause gas taxes in the U.S., Canada will be the only G7 country not to bring in a tax cut or subsidy to help deal with prices at the pump.
Biden on Wednesday called on Congress to suspend federal gasoline and diesel taxes for three months. Meanwhile, the U.K., Italy, and Germany (lower taxes), France (a consumer rebate) and Japan (a subsidy to wholesalers) have all taken similar action.
As inflation — headlined by gasoline price hikes — hits highs not seen since Billie Jean was topping the Billboard charts and Return of the Jedi was in theatres, will Canada follow suit? Should it?
So, far the answer from Ottawa is: not at this time. Natural Resources Minister Jonathan Wilkinson said earlier this week the federal government has no immediate plans to cut prices at the pump with a temporary reprieve from the federal gas tax.
Canada is instead looking to stabilize global oil prices by increasing supply, something Wilkinson said is starting to happen. He also said aid for Canadian families is, in the meantime, focused on areas Finance Minister Chrystia Freeland highlighted in a speech last week: increases to federal benefit cheques, cuts to child-care costs and upcoming increases to Old Age Security and the Canada Workers Benefit.
Conservatives have called on the Liberals for months to cut gas taxes, including lifting the GST from gasoline, temporarily suspending the carbon price, or lifting the 10 cents per litre federal excise tax.
Not the solution, experts say
Rory Johnston, founder of the oil market data service Commodity Context, says any type of gas tax holiday would appear to help the poorest in society, who are most affected by gas prices as a percentage of their income. However, he told CBC News, that approach is the wrong tool for the job at hand.
The main reason for high gas prices is an acute supply shortage, he said; artificially reducing the price at the pump won’t help.
“The prices are going to rise until you kill demand so that the market can balance,” he said. “We’re just draining inventories right now, left and right. So by creating a holiday for gas tax, you are essentially subsidizing further consumption at even lower prices.”
Johnston says he’s not sure why the Liberals haven’t moved more quickly to reduce prices at the pumps but speculated the government is concerned about the narrative around the transition to cleaner energy. “Since I’m generally against the move [toward a tax holiday], I’m not disappointed,” he said.
Prof. Kevin Milligan of the Vancouver School of Economics at the University of British Columbia agrees a tax holiday is not a sound policy, given how tight oil is on the supply side.
“When that’s the case, the market producers have more power,” he said; and that means a tax cut is more likely to increase producer profits than bring down consumer prices.
Johnston says he understands the pressures governments around the world are under to do something.
“This is a moment, I think, that calls for creative, out-of-the-box policymaking — things that we haven’t necessarily tried before.”
He offered three ideas:
- Rethink the gas tax. Create a sliding escalator tax, that drops when gas prices rise, but goes up when prices drop, removing some of the volatility from gas prices.
- Offer direct cash, but only to the lower end of the income spectrum. Sending money instead of lowering taxes would make life more affordable without artificially subsidizing the price of a scarce resource, he says. But both Johnston and Milligan warned that simply writing cheques for everybody to deal with gas costs risks making inflation worse.
- Look into restarting some facilities, like the Come by Chance, N.L., refinery, which was shuttered early in the pandemic and is now being converted for renewable diesel. Bringing back oil production “will help reduce that refining bottleneck and to get the price we’re paying at the pump back down closer to the price of overall global oil,” he said.
Milligan, for his part, says the federal government has a number of areas under its control that it can and should focus on to bring inflation down — relieving bottlenecks at airports, improving supply chains and lowering tariffs on imports — which would directly lower prices for Canadians in stores.
He also stresses that the Bank of Canada must be allowed to do its job to bring down inflation.
Milligan said the challenge is that governments generally try to focus on the broad middle class during times of crisis.
“The problem is trying to find something that is not inflationary in itself that can help out the broad middle class,” he said. “That’s where a lot of the challenge comes in.”
Vinclum cheat investors of $1.5m — with lure of $16m profits
Alleged Vinclum Corporation fraudsters conned their creditors of more than $1.5m, a sum which was to be used to leverage $16m in an investment scheme that never took place.
Robert Allen, then director of Vinclum Corporation, Toronto, together with Daniel Carrasco, Wojciech Karcinski (often referred to as Peter Karcinski) and several other individuals employed by the Vinclum Group, allegedly persuaded their investors to wire funds for the scheme.
Allen and his associates reportedly convinced one financial services director to part with an initial $250,000.00, which in several stages would eventually generate profits of $16m. A second party, acting on behalf of six clients, invested a further $1.25m in the scheme. The funds would be used for the purchase of DLCs (Documentary Letters of Credit).
A DLC is a frequently used banking instrument in international trade. It instructs an issuing bank to pay a seller, normally in connection with the export of goods, with the bank acting as an intermediary in the transaction. The holder may be able to borrow against a future payment, at a loan-to-value ratio of up to 50%. Allen and the Vinclum Group were said to have connections with international banks that would facilitate a legal scheme to exploit this instrument.
Under the scheme, when a $4m DLC was redeemed, it generated cash of $2m. These funds would be used to purchase a larger DLC of $32m, which would generate $16m in cash, which would then be distributed between the alleged fraudsters and the victims.
The victims wired the funds with the belief that DLCs would be bought and monetized. However no such DLCs were purchased in relation to the agreement, it is claimed.
Despite repeated requests, and assurances by the Vinclum Group that the funds would be returned, no refund has been received.
A motion for injunction has been filed to freeze the assets of the accused while fraud investigations are underway.
More Charges Dropped Just Days Before Trial Against Activists Who Exposed Animal Cruelty at Excelsior Hog Farm
What: Press conference & start of four-week trial for the Excelsior 4When: Monday, June 27, press conference at 9am, trial at 10am Where: BC Supreme Court, 32375 Veterans Way, Abbotsford, BC
Is The Canadian Online Gambling Industry Regulated?
Like in many western countries, gambling is a popular pastime for many Canadians. Throughout Canada’s evolution, it has strived to give its citizens the freedom of gambling across the provinces. Thanks to this, casinos in the country have grown and thrived over the years, from land-based casinos to the more modern online gambling sites.
Interestingly, government-sponsored sites have also joined the online trend. While other nations globally move from one extreme to the other in terms of their stand on gambling, Canadian lawmakers have generally used an even-handed approach despite the attraction of quick and easy money.
Generally, the country’s laws are flexible while simultaneously protecting the public’s welfare.
History of Canada’s Gambling Laws
The ‘90s marked a new age for the gambling industry in Canada because of the computer and internet boom. The first online casinos also launched during this era, and you no longer had to risk gambling in unlicensed casinos in Sweden if you could not access legal casinos. Avid gamblers could simply go online, although they were much fewer in number.
The first reason for this was only a few people owned computers. There was also a concern about the absence of online casino regulations. As the industry expanded, governments began establishing rules to control the sector. Today, traditional and online gambling is prevalent in the country since accessing casinos is much simpler now than before.
Is the gambling sector legal in Canada?
Online gambling had been illegal for years in Canada until quite recently. Now, it is legal in Canada in different forms. All the ten provinces and the three territories have the premise to set their own rules. The minimum legal gambling age in Canada is 19, apart from Alberta and Quebec, where players are only allowed to gamble upon turning 18.
All casinos, lotteries, racetracks as well as other gaming establishments must abide by the rules stipulated by their territory or province of operation. As previously mentioned, some forms of gambling are legal in parts of Canada and illegal in others. The country has two gambling laws; the First Nations Law and the Provincial Law.
The latter accords each territory or province control over gambling activities within its jurisdiction. Subsequently, some provincial laws are stricter than the federal regulations.
Today, many Canadians enjoy gambling online, from sports betting and live tables to traditional games like slots. Now that it is legal, you can safely access any reputable and legal casino online and physically.
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