Secondly, the Green Shift was bad policy. Its justification, "Pay what you burn not what you earn" is wrong. Taxation cannot be shaped by one policy arm. Taxation must remain progressive, which means that it is based on income. The Green Shift (and the more radical all-consumption tax platform of the Green Party) can only approximate progressivity by building in a whole bunch of subsidies and exemptions that overly distort our society. For example, they propose that people who live in the country should get rebates or tax deductions for gasoline usage (to support good old country livin') but not provide any help for people living in subdivisions (who are by definition bad). As someone who has lived in the country, I can tell you that the majority of country dwellers live in subdivisions in small towns - so then, presumably, we encourage far-flung subdivisions but not close-in ones.
The Green Shift was also ass-backwards in taxing heating fuel but not gasoline. We need to increase the tax of gas at the pump, as Europe has done. That leads to smaller cars, less lengthy commutes, denser housing, more and better public transit, and - most importantly - more consciousness of the environment. It also gives us some protection from massive increases in oil costs, as we can alter the tax but not the price of a barrel of oil.
By putting forward an overly ambitious and fundamentally flawed environmental policy, Stephane Dion set back the cause of environmentalism: he let the PM win an election on an anti-environmental platform, thus giving him a sort of mandate to ignore environmental concerns. He also made it less likely that future campaigns will risk fighting for the environment.
Environmental policy should use the standard three areas of government muscle: taxation, regulation, and public education. Environmental taxation should take the form of "sin taxes," which are consumption taxes on things we want to discourage, such as cigarettes and booze. It shouldn't be a blunt sword but a scalpel, hitting specific activities, and the revenue should be used for providing alternatives to those activities, such as public transit. (Dion's approach of creating a revenue-neutral environmental tax was a sop to the old, flawed vision of "small government good, big government bad" that will be replaced very soon by the new vision of an active state).
The "Green Shift" is regressive taxation because the poor use a higher percentage of their income on consumption, and thus (under a consumption tax scheme) pay a higher percentage of their income in taxes. We should be moving in exactly the opposite direction: we should be increasing the progressivity of taxation by adding tax brackets at the upper end. Currently, the highest tax bracket starts at about $122,000, which is woefully out of date.
The fact that consumption taxes have become a mainstay of green parties around the world is further evidence that the environmental movement is being overly influenced by the right. The environmental movement has historically been in opposition to movements that promote social justice because there is a split between using public funds for the environment or to combat poverty. Both should be treated as valid and important interest groups, but neither should gain iconic status as a pillar of Liberalism.