Federal Carbon-Tax System: Robust or Bust?

By Patrick O’Brien (AIMS On Campus Student Fellow)

The Federal Carbon-Tax has been the primary subject of debate in politics within the last couple months. The system is designed to tax consumers and businesses currently at the $35 per carbon tone, as an incentive to consume less and therefore produce less carbon emissions. Premier of Ontario Doug Ford has claimed that he will be dismantling the current “Cap and Trade System” that the Province abides by, and the next step will be the Federal Carbon-Tax system. The Cap and Trade system allows a certain carbon limit per firm to produce, and to continue production of goods, the firms either purchases credits from another company, or stop production. The main problem here is that the credit now “trade” like financial products in the carbon market, which independent companies then profit on by acting as a broker between firms that need the credits.

The new Federal Carbon-Tax is receiving a lot of criticism lately by politicians and consumers, as they feel the policy will not be as effective as initially stated. At the Summer Premier meeting in this past June, Premier Dough Ford along with Premier of Saskatchewan Scott Moe publicly announced that they oppose to the program, and that Saskatchewan will be going to court (with aid of Ontario) to challenge to proposed plan, and Federal jurisdiction to impose the tax on residents of Saskatchewan. PEI has also joined the list of growing Provinces who declare they will not implement the Federal Carbon-Tax program. PEI’s Environment Minister Richard Brown stated that the province will be able to reduce their carbon footprint by 30 percent below 2005 levels without introducing a tax. This will be included in the climate action plan to be submitted to the Ottawa on September 1st, but the Federal Carbon-Tax will not.

Why all the opposition against the carbon-tax program? The Provinces feel that the effects of this taxation on consumers would be unjust and would not promote the reduction of carbon emissions. Consumers would be affected by higher prices in gasoline, electrical heating, natural gas for homes, therefore effectively increasing the household costs and reducing the relative wealth of consumers. The other argument is that where a large amount of carbon emission comes from transportation, many driving would be hit with higher gasoline prices of roughly 11.6 cents per litre. Marginal but painful increase in necessity goods such as this would not have a profound effect on carbon reduction. It would just reduce wealth across consumers and consumption in other goods.

While some Provincial Governments are neglecting the Federal Carbon-Tax altogether, there has not been a definitive solution provided by these same Governments to replace the program. If they are to reject the Carbon-tax plan, then we need to see actual alternatives besides statements that just suggest action will be taken to reduce emissions. Besides the fact the countless hours and millions of dollars has been invested into the development of the Federal Carbon-Tax plan, it is also a major distraction to other large political problems Canada faces such as international trade negotiations, and primarily NAFTA. There needs to be a joint-meeting between Provinces, like that of this summers Premier meeting in New Brunswick, so that we can conclude with the next steps of carbon reduction across Canada.


Lessons from Atlantic Canada’s biotech sector: Part two

By Ainslie Pierrynowski (AIMS On Campus Student Fellow) 

In this two part series, I’ll examine several of the key factors behind the biotechnology sector’s success in Atlantic Canada—and what lessons they hold for other industries in the region.

It was the premier event for the industry. For biotechnology firms, the 2016 BIO International Convention offered a wealth of business opportunities. Its 15 000 attendees included major pharmaceutical companies, thousands of prospective investors, and exhibitors representing firms from around the world. The participating companies included several names which might have been familiar to residents of New Brunswick: Mycodev Group Inc., Soricimed Biopharma, Inc., and the Atlantic Cancer Research Institute, to name a few. In all, ten New Brunswick biotechnology companies and non-profits took part in the 2016 BIO International Convention, showcasing their work to a global audience. Their presence at this high-profile event is but one sign of Atlantic Canada’s growing biotechnology sector.

Find your area’s advantages—and showcase them to the world

A number of biotechnology firms have recently opened their doors in Halifax, where low operation costs have drawn in technology companies. The region as a whole has attracted biotechnology companies for a variety of reasons, including a growing network of business incubators and accelerators, low real estate and housing prices compared to large urban centres, and, as noted in part one of this series, strong research and development infrastructure.

In other words, Atlantic Canada has a number of advantages which have proven attractive to businesses. The region’s biotechnology sector provides a prime example of how Atlantic Canada companies can convey these advantages to prospective investors and business partners around the world. Atlantic Canada biotechnology companies send representatives to major conferences like the BIO International Convention. Businesses in other sectors would do well to follow the biotechnology industry’s lead and invest in networking opportunities. To ensure that these networking opportunities are productive, businesses in other industries should reflect carefully on the advantages which the Atlantic region affords their industry. Like their counterparts in the biotechnology sector, businesses should consider how these advantages can best be presented to prospective partners, clients, investors. At the 2016 BIO International Convention, for instance, the New Brunswick firms’ representatives coordinated with other Atlantic Canada biotechnology companies. Their appealing, unified messaging highlighted the rapid, continued growth of the biotechnology sector in Atlantic Canada as well as the region’s many natural resources.

In fact, for some biotechnology companies, partnership is at their core of their operations—and their success—as examined below:

Pursue partnerships

Nova Scotia’s Biomedical Translational Imaging Centre (BIOTIC) offers an instructive example of how industries can forge profitable, lasting, local partnerships.

To the dismay of Atlantic Canada’s biotechnology firms, the National Research Council (NRC) closed its medical device lab in Halifax. The IWK Health Centre, the Queen Elizabeth II Health Sciences Centre, and the region’s life sciences community banded together to fill the void left behind by the NRC lab. This partnership gave rise to BIOTIC, an imaging centre focused on the development and commercialization of medical biotechnology. What sets BIOTIC apart from other biotechnology businesses, however, is its partnership-based research model. That is, BIOTIC forges business partnerships with companies and research institutions. BIOTIC offers their partners with the expertise, equipment, support services, clinicians, and patient populations needed for the development of new biotechnologies. In turn, BIOTIC can collaborate with leading medical companies like GE Healthcare Canada on the creation of profitable new products and processes.

Partnerships can not only lead to valuable opportunities, but can facilitate economic diversification:

Diversify your industry

In an earlier op-ed, I noted that economic diversification is incredibly important to long-term economic growth and stability in Atlantic Canada. Essentially, Atlantic Canada’s economy needs to encompass a wide range of different, strong, and profitable industries. Doing so will reduce the chances of a crisis in a particular economic sector devastating the economy as a whole.

To further mitigate this risk, however, the region also needs intra-industry diversification. The biotechnology sector can serve as a useful guide here. The industry encompasses a wide range of subfields and applications, from the microbial production of insulin to the process of fermentation used to make alcoholic drinks. In Atlantic Canada, for instance, one can find industrial biotechnology, which produces enzymes (specialized proteins) for use in household cleaners, fuels, and other useful products. The region is also home to agricultural biotechnology, marine biotechnology, medical biotechnology, and more. As a result, an unforeseen event affecting one particular biotechnology field becomes is less likely to topple Atlantic Canada’s entire biotechnology sector. Therefore, the region’s businesses should seek to expand and branch out into new subfields and niches within their respective industries. Doing so could not only help these businesses to stand out, attract a wider customer base, and gain a competitive edge, but could also improve the region’s overall chances of economic survival.

Ultimately, the growth of the biotechnology sector in Atlantic Canada represents more companies, more job opportunities, and greater economic diversification and growth. The industry’s emergence also represents a new, successful approach to doing business in Atlantic Canada—an approach which many of the region’s industries could benefit from following.




Halifax Taxi Monopoly vs Uber

By Patrick O’Brien (AIMS On Campus Student Fellow)

Uber is a service that many consumers want to bring to Halifax, Canada. Even though consumers advocate for the ridesharing service to be implemented, cab companies certainly do not. The taxi service in Halifax is an effective monopoly, whereby there are only two taxi companies that absorb all the business. These companies pay provincial fees to operate in their designated area, special taxi licenses, and have a large overhead cost in their contact centers. When you incorporate all these expense into the revenue that the taxi service provides, it doesn’t leave much room for competition amongst other companies. Uber poses a large threat to the monopolistic business, as the ride-service contractors (your Uber drive) are not regulated by the province as ordinary taxi service providers are, and therefore don’t have to pay regulatory fees, have a much lower cost of operations, and can offer cheaper rides.

When discussing benefits for consumers and why they would choose Uber versus a normal taxi, majority of people do so because a quick and cost effective alternative. The bigger concern many consumers should ask themselves, but don’t, is whether they are safer in Uber compared to a taxi? According to an article written by Postmedia Network Inc. majority of Uber drivers are not properly insured when in accidents, as ordinary taxis must be insured to carry passengers legally. Aviva insurance has introduced a solution. A new type of insurance called ride-sharing insurance which protects the driver carrying passengers in the event of an accident. The requirements are limiting, which means many drivers will not be able to qualify. To qualify, a driver must hold a license for a minimum of six years, is only eligible to work 20 hours a week, and eligible only for residents driving in the province of Ontario. The problem is many young/new drivers with good records won’t be able to qualify, and If this was a full-time job for the individual, then they need to reduce their hours in half, which naturally will not happen for those who depend on the income full time and therefore won’t be covered during an accident past 20 hours.

What is the result of Uber breaking into the taxi industry? A study published by Forbes Magazine gathered data about the effects of uber on the income of taxi drivers in multiple U.S cities. On average salary for taxi drivers decreased 10%, while self-employment increased over 50%. This is a drastically contradicts the widespread theory or thought, that Uber is destroying jobs and killing the market. In fact, as shown by this study, it is doing the exact opposite. When looking back to a small city like Halifax, the effects may be different. While the market is largely dominated by two taxi companies, (Casino Taxi & Yellow Cab) there are independent drivers in Halifax, who pay large fees for their license in order to operate independently with the use of a call center that provides the service of referring clients to them.

With that being said, Uber had the possibility to change jobs, and the costs for independent drivers by allowing them to enter the market with greater ease. Even though it disrupts the taxi industry, maybe that change is needed, and should be embraced. Just like major companies that need to adapt to new technology and laws to remain competitive against their peers, why should taxi companies be exempt from this?