I didn’t ask for lower gas prices

The federal government announced in mid-April that it was going to suspend its excise tax on gas, diesel and aviation fuel. This is meant to address the problem of affordability in the light of increasing fuel costs resulting from the U.S.’s war with Iran. But the problem is that fuel is scarce, which is why prices are going up. Decreasing the price of a scarce commodity only accelerates demand, which makes the commodity scarcer. 

The federal government has made this mistake before: trying to respond to the housing crisis by giving subsidies to first-time homebuyers. But subsidizing demand doesn’t solve the problem of high prices in the long run. A policy that makes it easier for me to buy a house increases overall market demand, which raises prices for everyone. Mark Carney is an economist; he knows this.

Affordability solutions

Making it a little easier temporarily for people to drive more doesn’t do anything to make transportation more affordable for everyone in the long term. There are two ways to make life more affordable: one is to put more money into people’s pockets, the other is to reduce their need to pay so much out of their own pockets to meet their needs. I think that the government should be much more focused on the second option: we need to invest more in “public goods” – things that we all contribute to and are accessible to everyone equally. 

We do this with healthcare. Most Canadians don’t have to “save up” or go into deep debt to afford health care. We contribute to it through our taxes, so it’s there without cost when we need it. In some places we do this with public transportation. We all contribute to it so that it is available to all of us at a relatively low cost. In some places, this means that people don’t have to own a car (or can only own one rather than multiple cars), which saves them many thousands of dollars a year and saves us all the costs of the pollution, noise and danger of sharing a city with more motor vehicles. 

Parks and buses

If you don’t have a good public transit system, you have to pay for the costs of getting around out of your own pocket and that’s way less efficient than us pooling our resources. If you don’t have publicly supported green spaces, you have to pay for the costs of green space by buying a bigger property, and that’s way less efficient than sharing our parks.

Pursuing the common good means contributing to the good of the things we have and hold in common: the environment, our infrastructure and our shared institutions. Having these things in common also means we don’t have to pay for them out of our own pockets! That’s a much more sustainable way to make life affordable than subsidizing demand for a scarce (and costly) commodity. I’ll pay the gas tax if my kids can hope to live in a city where they never have to own a car.