A political obituary for a cynical green bribe Energy Star

SHADES OF GREEN

Sep 05, 2009 04:30 AM Peter Gorrie

It passed into history this week with barely a murmur.

As of midnight last Monday, the Ontario government no longer offers a sales tax rebate on Energy Star appliances.

The quiet departure was in sharp contrast to the noise accompanying the announcement of the rebate's birth, with a provincial election looming, on June 20, 2007.

"We want to drill right into people's homes and make it financially wise for them to go out and buy energy-efficient appliances," Premier Dalton McGuinty proclaimed.

"This is really a win-win situation," said then-finance minister Greg Sorbara. "For consumers, they will pay less for these appliances... They will be consuming less energy in the home. For all of us, it means we are consuming less energy, and that's part of the battle on climate change."

Sorbara estimated it would cost the provincial treasury a suspiciously precise $51 million to exempt energy-saving refrigerators, washing machines, freezers, air conditioners and other major household goods from the 8 per cent tax by the rebate's original expiry date, July 20, 2008.

A year later it was extended for another year and a bit.

There are no plans to give the rebate further life, although at least one major retailer is maintaining the measure, at its own expense, until early October.

There's no particular reason to mourn the rebate's passing: It was always more about politics than the environment.

The measure was originally introduced by the previous Conservative government late in 2002 - again, with an election on the horizon. Soon after their victory, the Liberals cancelled it. Three years later, they deemed it popular enough to be added to their list of ballot-box bribes.

And the rebate would have disappeared next summer with the arrival of the harmonized sales tax.

This is a moment, though, to consider better policies, and the need for a more coherent, longer-term energy-efficiency strategy.

While the rebate certainly raised the profile of Energy Star appliances, its impact on how many were purchased is far less certain.

"As this is a point-of-sale exemption, the ministry does not track individual sales transactions," a Finance spokesperson replied when asked if there's any way to determine whether the tax break rewarded consumers for something they would have done anyway.

The same problem afflicts many of the current myriad incentives, including cash for fuel-efficient cars: How do you ascertain whether they alter behaviour from business as usual?

Like the other giveaways, it also raises the fairness of shuffling tax dollars to those who can afford major purchases.

If the government was really serious about efficient appliances, it would, for example, require that all those sold here meet Energy Star standards, and it would make those standards increasingly stringent - just as it would ratchet up the mandatory energy-saving requirements for new homes. Economies of scale and competitive forces would likely bring prices below those the rebate produced.

The Energy Ministry ambiguously promises its new Green Energy Act will include measures "establishing North American-leading energy efficiency standards for household appliances, making energy-efficient products more available to more consumers." Details are to emerge over the next while.

But judging by the promise's cautious wording, a full-scale effort seems too much to expect.