This week, we hear about a $2.5 billion Federal energy rebate program that will pay families with less than $35,000 a year in income $250.

Seniors with less than $30,000 a year in income will also receive $250. Low income families will also be eligible for $3500 to $5000 in conservation incentives but the majority of working Canadians will receive nothing.

Oil prices are down from $70 a barrel to near $60.

The stock \market responded to the decline by lowering its investment in the energy field. The president of Imperial Oil would like to see it fall to $30 a barrel. However, investment fund-managers remain bullish about energy stocks as analysts suggest that the least little hiccup in the market that could affect the supply of oil or refining capacity could push the price back up again.

As price speculation rages, Paul Martin is linking energy to resolution of the Canada – United States softwood lumber issue and U.S. refusal to abide by a NAFTA (North American Free Trade Agreement) decision that ruled in favour of Canada. Implicit in that link is that Canada might be tempted to void its energy agreement with the United States as it relates to NAFTA by reducing exports of oil and gas to that Country or by increasing the price of our exports to the United States.

While Mr. Martin is doing the energy-softwood link, the president of General Electric is calling for a North American energy policy that would invite government intervention. He doesn’t go so far as to advocate price controls. He wants more government investment in infrastructure – read pipelines to ensure better access to energy across the continent. Read better access to canadian energy resources. Go figure!

Meanwhile, here in Moncton the Times & Transcript is criticizing the management of NB Power for applying to the Public Utilities Board for a 14 to 16% electricity rate increase while ignoring two fundamental parts of the equation

• (i) that the Provincial Government has instructed NB Power to operate on a cost-recovery basis and,
• (ii) that rates are increasing because of the cost of oil. It seems to me that the management of NB Power is caught in the middle and not the guilty party.

The Federal rebate program would provide low income families with the $250 to offset their heating costs. They will also provide incentives up to $5,000 to increase the conservation of energy in lower income homes.

It would seem to me that it would make a lot more sense to remove the HST on heating costs and then everyone would benefit. If energy costs remain high, we’re going to be in for some major inflation in this Country as prices start to go up for everything that has an energy component in its cost structure.

Do the math! If you put 50 litres of gasoline in your car every week and prices average 30¢ a litre more than they did last year, you’ll lose about $750 this year. If it cost you $3,000 to heat your house last year, it could cost you $400 to $600 more next year.

If you spend $5,000 a year on food and the price of food goes up 10% because of rising energy and transportation costs, you could add another $500 for food. If your family spends $2,000 a year for clothing, add another $200 for energy and on it goes.

If your family income is $70,000 a year and you’re giving away $2000 or $3,000 a year in new energy costs, what are you going to give up to pay for them? Will it be your vacation or your car?

Will it be cable for your television set or hockey for the kids?

Will you have to sell your car or send the kids to work? Will you turn off the lights or just turn down the heat?

Will your boss help out by giving you a raise or will you have to go to the bank and ask for a loan?

The answer is that it has to be one of the above because the Federal and Provincial rebate programs won’t affect you if your family income is more than $35,000 a year. These programs are for the lowest income families only and they’re not big enough to make a difference for anyone except in so far as some help is better than none.

Instead of rebates for the poor, why not tax relief starting with removal of the HST from energy purchases if prices don’t settle back near last year’s prices. Everyone pays taxes on energy, not just the wealthy.

In fact, consumption taxes on essential purchases like electricity, heating fuels and gasoline to get you to work hurt the poor more than they do the wealthy. Heat and light are essential purchase in our society and in our climate. At the very least, the first $2,000 or $3,000 of your energy purchases should be free of sales tax. That would save everyone $300 to $500 a year.

Sure, those people who don’t need the money will use it to buy something else but that could be a good thing if it creates new economic activity that in turn increases employment levels in Canada.

In addition to the tax cuts, Governments should also be directing energy providers to build conservation incentives into their pricing models – the more energy one uses, the more one should pay for that energy.

We need a coherent energy policy in this Country that addresses the long-term energy needs of Canadians. I don’t think a knee-jerk reaction to a spike in energy prices represents a long-term vision.