The Squeeze – How Energy Costs are hurting us

In 2004, we spent about $312 million on energy on PEI. This included Gas ($150 million), Diesel ($69 Million) Heating Oil (87 Million) and Electricity ($6.6 Million). The Tax estimate for the province for the 2004 year was $524 million.

Energy costs were 60% of the Island Tax base.

In 2008 – We will spend about $570 million on Energy. 109% of the Tax base in 2004 and an 83% increase in total costs for us Islanders. This is now about 91% of the 2008 estimated tax base.

In effect we spend as much now on energy as on income taxes. The estimate of the total amount of Federal Funding for PEI for 2008 is $556 Million. So we pay more in energy than we get from the Feds!

At least with our taxes, most of the money spent remains on PEI. But with our spending on energy most of this money leaves the province. We are being impoverished by this process.

This is why our first step has to be to reduce our individual spending on energy.

Here is the current breakdown of what we have to deal with:

What the figures show me is that the easiest area to work on right now and the best area to reduce the pain in all our pocket books is heating. Heating of our homes and heating of all public buildings. Working here also gives those who are the most vulnerable the most immediate relief.

The average home on PEI uses 3,500 litres of heating oil a year. That is $3,815 a house at current prices.

With work we can hope to reduce this systemically and permantly by abut 40% – That’s $1,526 back in your pocket.

If we could save 40% on all heating oil (include Schools, Manors etc) that would bring $72,000,000 back into circulation and keep this money on PEI. For remember, all but a fraction of our dollars that we spend on heating oil leaves PEI.

In this context then, the money that you and I spend on insulation etc is not like buying a TV. It is like buying a tax free Bond. It is like you buying an RRSP – it pays you back tax free.As oil prices rise, so does your return.

Of course the opposite is true. If we do nothing, we will soon be paying more in energy costs than in taxes. This money will leave the Island and we will be soon unable to pay for what we need to live.

At first many will have to choose between eating, heating and working. Then we will have to cut all spending – our schools are very vulnerable, healthcare, roads – all will have to be cut back.

As I looked at the numbers for even 2008, it is clear to me that even if oil prices stay the same, that we are on the slippery slope. With the reality of Peak Oil – we have to act now.

Heating first for both homes and government itself. Then we have to look at our driving habits.

I will post shortly on how others are making large reductions here.

Then we have to look at alternative sources that we can control on PEI

Jobs and Taxes – How going Local will get you more Jobs and Less Taxes

So now we have elections on both sides of the border. All parties in both countries will be making promises about jobs, gas prices, taxes, security, families, health care and education.

In short the deal will be I will get you more for less.

I think you can get more for less but not in the conventional way. Let’s see how a more energy and food independent PEI or your place can deliver on the idea of “More for less”.

Taxes – One of the biggest taxes we all pay are our energy bills – our oil bills. More than $300 million leaves PEI in our payments to non Island providers. What stays here are the wages of a few tanker drivers and gas station workers. This “tax” affects the poor more than the rich and buys us NOTHING. It is just a drain.

As the price of oil rises, so will this tax. Look at the heating bill of the Eastern School Board – up a million dollars in the 2008 season. I wonder what the heating bill for the Hospitals and Manors are? The money we pay as individuals and as a province on oil takes away from every thing we do. It will reduce our ability to have an education and health system, it will reduce our ability to feed our families and it will reduce our ability to go to work.

So reducing every litre of oil we use as individuals or as a province, puts more money back into our pockets.

Jobs – We are in the last stages of a work design model of centralization and bigger and bigger. With the Maple Leaf crisis we have found that ONE plant in Canada that makes most of the processed meat. With the pet food crisis, we found that one plant makes all the pet food in North America! We have said good bye to our bottler – soon there will be only one bottling plant for Canada! Will there be a Canadian car making plant left soon? How long will we have 5 banks

PEI and other places that are on the edge lose out in two ways. First of all, we are not at the centre. None of these jobs will be coming here. They can’t. Secondly, these jobs are going to disappear anyway. So long as we operate in a global market, wages will have to settle to meet the reality of a 6 billion person world. All factory wages will move to a global price.

The traditional jobs that working people had are going away and being replaced with minimum wage jobs. The few entry jobs that used to take the well educated up the ladder now take you to a dead end in a call centre.

There are no traditional good jobs coming here. They can’t so long as we stay inside the old model.

So where will be the new GOOD JOBS? The new good jobs will be local and they will be in doing things that are valuable locally not Globally. What might these be?

• Growing local food. We grow almost none of our food locally. Like for Oil, we pay companies like National grocers and Sobey’s to supply our food. Like for oil, most of our food dollar is a “tax” that leaves the Island – only the minimum wages of the local staff remain here. Most of the income of our traditional farmers goes to their suppliers in oil and chemicals. They get left with the scraps. The interest and fees that they pay go to a financial system that sucks the money from our region. What might growing our food locally look like? It would be lots of small high intensive mini farms with large regional local farmers market where nearly all the money we spend would stay on PEI

• Building and operating a local energy system – pellets, wind, hydro, hydrogen – and conservation will all supply jobs that have to stay here and will be paid in connection with local realities

I am sure that out of these will come another host of good local jobs. For as we ourselves become more local on PEI, work of all sorts will return to our local communities. The village store, the village school, workshops …

Health care – With a more local world, there will be less alienation and hence better health anyway. It is not access to drugs and doctors that keep us well. The more control you have in your life is the most important factor in health. With better food, the healthier we will be.

Education – With a more local world there will be less stress in family life. The single most important determinant of a child’s potential is the stability of its family life. The village that we will need to raise our kids can come back in a more local world.

Of course none of this is on any official agenda yet. I am sure that we will be offered to take it on trust that governments will lower our taxes and yet put more money into jobs etc.

What’s your take?