A General Anti-Avoidance Provision For Pollution

For decades now, Canadians and citizens of other western nations have seen a slow but steady loss of industry and jobs to jurisdictions that have weaker pollution regulations and costs than in their own countries.

Some of this has occurred under the banner of free trade and some as "ecomonic development" for the third world.

But these actions have had major impacts in Canada.

First, they have led directly to the export of highly skilled technical jobs.  Abiet sometimes you don't need as much skilled labour if pollution controls and labour laws are non-existant.

Second, the pollution created in the new jurisdiction is often worse than previously produced in Canada.

For many years now Canada has had a General Anti-Avoidance Provision in its tax code to cover off the unforeseen risk that individuals and corporations might be tempted to arrange their affairs for the sole purpose of paying less tax.

It should not be surprising that the same risks have appeared as pollution regulations have become tighter.

A glaring example of this is in Canada's oil patch.

Canada gets the benefit of the largest blotch on the globe of soil and water pollution from the production of tar sands.  But the upgrading and refining is shipped to US regions where air and water regulations are much weaker on those industries.

In fact, not much of Canada's oil refining industry has survived.

A general anti-avoidance provision would fine the exporters of Canadian products who ship them to jurisdictions where processing costs are lower due to savings on pollution control costs.  The fines should elimate any such savings.

This could be applied equally to exports of metals and minerals, oil and gas, forestry products, even food.

In a broader sense, this could even be applied to how power is produced to process materials.  Such as coal plants that don't meet Canadian standards.

If Canada is to take action to reduce the effects of pollution as a result of our activities and consumption, we cannot pretend that if the pollution is created outside of Canada it never happened.   We could become part of the solution to global pollution (and that highly charged climate change issue).

As it stands, we have been merely exporting our pollution, carbon footprint, and jobs to other countries.

And besides, we know the pollution we cause by permitting the export of Canadian goods for processing to regions where the regulations are weaker does end up migrating back to Canada eventually.