The Ontario government has announced the details of its “climate-change action plan.” Under the five-year plan, up to $8.3-billion would be spent on subsidies for renewable energy and low-emissions technology support. In doing so, the government has taken a U-turn from a wise cap-and-trade policy toward costly subsidy programs.
The government was on the right track previously by relying on a cap-and-trade program to price emissions. This is a cost-efficient way of reducing emissions because it reaches the desired goal by letting market participants figure out the best way to do so.
The government plans to finance the new subsidies with revenues from an auction for permits that greenhouse-gas-emitting companies…
The way we watch television is changing rapidly, but our regulations aren’t keeping pace. The federal government’s recently announced review of Canadian content and communications policies is an opportunity to catch up. The review should replace Canadian content rules with direct subsidies, focus regulatory hearings on the benefits of competition between technologies and drop ownership restrictions.
Ottawa now supports Canadian content in many ways. It requires broadcasters to offer a certain proportion of Canadian content, and funds that content either directly or by requiring broadcasters to chip in. And it financially supports the Canadian Broadcasting Corp.
The government regulates the sector through the…
You may be surprised to learn this, but economists are not the same as “normal” people. The main difference relates to how the two groups think about markets and prices. Most people, including elected politicians, don’t think much about the workings of markets and prices. This is a serious problem when it leads to the adoption of poor public policies.
Consumers think about the prices of the goods and services they consider buying. A high price for some product makes them consider alternatives; a low price increases the likelihood they purchase it. Business managers think about prices as ways to cover their costs and generate profits. Higher prices make a venture more attractive; lower prices reduce returns and encourage a search…
