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February 23, 2005

Canada Plans "Free-bates"

This afternoon, Ottawa unveiled its budget. It's got several line items of note, including $5 billion for cities through an agreement to hand over some of the proceeds of federal gasoline taxes. It's also got $5 billion over five years for environmental programs, with an emphasis on complying with Kyoto. Creative components include a fund to help catalyze entrepreneurial greenhouse-gas reduction schemes.

To me, though, the most exciting announcement is an idea that was simply floated, not really included. Canada is still seriously considering adopting vehicle feebates, potentially one of the most powerful tax-shifts available. Word of this initiative came out last summer, as we noted at the time. But then everything went silent, and I got nervous. I needn't have worried. Apparently, government leaders had simply stolen into their top-secret policy laboratories and were performing the delicate operation of inserting an "r" into this innovative reform's name. Thus, not "feebates" but "freebates."

(I mock because I care. And I bet "freebates" will sell better than "feebates." Everyone wants something free; no one wants a fee. The tax shift itself remains unchanged: a fee charged to buyers of inefficient vehicles, a rebate paid the buyers of efficient vehicles. The size of the fees and rebates proportional to the efficiency of the vehicle. And the fees fully funding the rebates each year.)

The Globe and Mail reports

Within the budget, Ottawa also floated the notion of a vehicle "freebate" that would not only offer a rebate to consumers buying energy-efficient vehicles but also "impose a fee on fuel-inefficient vehicles."

"Over time, a freebate could contribute to the improvement of the fuel efficiency of vehicles purchased in Canada, reduced greenhouse gas emissions and improved air quality," Wednesday's budget said.

The government, the budget said, is now negotiating with the auto industry to strike an agreement that would improve the fuel efficiency of vehicles sold in Canada. Ottawa is also asking the National Round Table on the Environment and the Economy to develop options on a so-called freebate. No timeframe was given on the idea, which Ottawa said would be "revenue neutral" for the government.

UPDATE 2/24: Well, I looked for details in the budget itself and--wouldn't you know?--there's no extra "r" there. It seems the venerable Globe and Mail added the consonant. The budget itself just says "feebate." Ah well.

Posted by Alan Durning | Permalink


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Regarding your "update":
On a positive note, you and the Globe and Mail might have accidentally started something good!
I, personally, never really liked the word "feebates," and therefore found myself ignoring/rejecting the idea behind them. (Nobody likes a fee!)
Therefore, I entirely agree with your rationale that "freebates" would attract people's attention and curiosity faster than "feebates."
Lead the way, Alan! Even the invention of "Post-it Notes" were the result of an accident!

Posted by: Michelle Parker | Feb 24, 2005 6:01:37 PM

Sorry! I got my grammatical wires crossed there.
Of course I meant to say, above:

Even the invention of "Post-it Notes" WAS the result of an accident!

...I probably still had that "extra r" on my mind, as it were (was? no, were. maybe either one in this case!).

Posted by: Michelle P. | Feb 25, 2005 9:34:39 AM

This is a terrific concept that should be applied to the energy industry as a whole. Fees on all fossil fuels and "Freebates" on all green energy - wind, solar, etc. Right now I have to pay extra in order to obtain green energy - this is insane!

Posted by: Hank Bennett | Feb 25, 2005 8:50:47 PM

I've managed to save up roughly $43511 in my bank account, but I'm not sure if I should buy a house or not. Do you think the market is stable or do you think that home prices will decrease by a lot?

Posted by: Courtney Gidts | Nov 14, 2005 9:17:53 AM