National Post from Toronto, Ontario, Canada • 39

NATIONAL POST, FRIDAY, APRIL 30, 2010 financialpost.com FP11 FP COMMENT TERENCE CORCORAN The reverse National Energy Program torial nbridge crusade Strategy boards to CEO (NAS) to Toronto Pat that outline Daniel would yesterday, his brought vision unleash visiting of his the a oil global National sands newspaper power Energy energy edi- of Canada's oil sands to save the world's poor from energy shortages and fossil-fuel deprivation. Saving the Third World from energy shortages may not be the first thing that comes to mind in connection with the oil sands, but that's the latest element in Mr. Daniel's ongoing campaign for a comprehensive national oil sands development strategy. To meet his objective, Mr. Daniel told National Post editors that Canada will need to bring in carbon taxes, cap-and-trade regimes, subsidies for renewable energy and major conservation efforts.

The number one objective, he said, would be to develop Canada's oil sands, a plan that includes Enbridge's proposed Northern Gateway pipeline from Alberta to Kitimat, B.C., from where oil would flow to the energy-starved regions of the Asia-Pacific. Whether this crusade for a national oil sands strategy is one environmental activists will embrace seems doubtful. Even more in doubt may be support from Canadians who already support the oil sands as a market-based development in a free trade economy. That support could fade fast once they get a handle on Mr. Daniel's multi-faceted plan to tax the hell out of consumers to get his plan up and running.

If that's what it takes to develop the oil sands, many Canadians may well say forget it. We can all understand where Mr. Daniel is coming from. His company, Enbridge, is highly successful at running giant regulated utility systems whose profits are often guaranteed by governments. Recent annual returns of on equity have kept steady through recession and recent slowdowns.

When the government guarantees much of your profits, it's hard to lose money. What Mr. Daniel appears to be looking for is not so much a National Energy Strategy as a national regulatory system to codify massive transfers of wealth from one energy source to another, from consumers to the oil sands, and from the oil sands to Third World countries. The 1980 NEP transferred nationalized oil industry money to consumers. The new version transfers money from consumers to the energy sector The latest version of Mr.

Daniel's NAS looks much more explicit than earlier efforts, and much more interventionist. In 2007 he was a leading member a Euro-Canadian Energy Roundtable that supported a new national energy policy for Canada. "I believe firmly," he said in 2007, "that developing and implementing a national energy strategy would help resolve many of the issues" facing the oil and gas industries. A national oil sands strategy, he said in a 2009 speech to the Public Policy Forum, would help industry deal with regulatory hurdles. "This is of course a major concern to pipeline builders like Enbridge who are investing billions in infrastructure projects." To sell the idea to the public and policymakers, Mr.

Daniel then advocated imposing a tax on oil sands that would be used to fund education programs. What better objective could there 1 be than "investing the revenues from the oil sands development in the best possible industry to support sustainable long-term growth and prosperity for Canada: education." Yesterday, Mr. Daniel made no mention of the education tax. Instead, he raised the moral bar by portraying oil sands development as something close to a national effort to free the world's poor from energy shortages. Canada has the oil sands, one of the world's richest stocks of hydrocarbon, and billions of people in the world need that Canadian energy.

It is, he suggested, a national imperative, a great humanitarian effort. "We do have a challenge, "he said. "We have too much hydrocarbon" and the world needs hydrocarbon. In a dazzling mesh of environmentalism, corporate social responsibility mush and regulated industrial development theory, Mr. Daniel proposed carbon taxes and cap-and-trade carbon regimes for the oil sands and fossil fuels.

The money would be used to fund renewable energy sources of which Enbridge is a leading provider under various government-subsidized regimes in Alberta, Ontario and elsewhere. Indeed, Enbridge and green groups helped design Ontario's notorious feed-in-tariff subsidy system. Mr. Daniel logically supported Ontario's transfer of wealth from electricity consumers to wind and solar power firms such as Enbridge. In some ways, this is a giant national policy role-reversal.

In the 1980s, the Trudeau Liberals brought in a National Energy Program that essentially involved nationalization and confiscation of oil revenue from Alberta and transferred it to consumers, mostly in the East. Mr. Daniel's National Energy Strategy aims to transfer wealth from all Canadians into oil sands and renewable energy sources controlled by energy firms such as Enbridge. And all in the name of delivering cheap oil to save the Third World from shortages of energy. Will Canadian buy it? It costs Canadians between $4-billion and annually to comply with personal income tax rules Our costly taxes ver the past several weeks, Canadians have been grappling with the stress and anxiety of completing their income tax returns.

Once the paperwork is complete and the numbers neatly added up, many will be shocked by just how much of their income they paid in taxes last year. Even more eyeopening, that total does not take into account the myriad other taxes we pay. Not only are governments taking a significant portion of our incomes in taxes, we're forced to sweat, stress, and spend hours complying with the tax system. It's time the government addressed the complexity of Canada's income tax system. A recent study, The Costs to Canadians of Complying with Personal Income Taxes, by Vaillancourt, professor of economics at the University of Montreal, used the results of a survey carried out by Leger Marketing on behalf of the Fraser Institute of 2,000 Canadian tax filers to calculate the enormous costs imposed on Canadians to comply with income tax regulations.

Despite the widespread use of computers over the past 20 years and continuously simpler software programs such as QuickTax, the number of Canadians using paid help to complete and file their income tax returns continues to increase. The survey found of Canadian tax filers paid for professional assistance (e.g., accountant, lawyer NIELS VELDHUIS or firms such as Block) to prepare and submit their tax returns. In 1986, only of tax filers used paid help. Meanwhile, only of Canadian tax filers prepare their returns themselves, while rely on friends, family, or a non-profit organization. The survey also found Canadians spend an average of five hours gathering receipts and forms, preparing, meeting with tax professionals, completing their tax returns.

When time spent on tax planning and appealing Canada Revenue Agency or Revenue decisions is included, Canadians spend an average of seven hours complying with personal income taxes. In addition, the Canadians spend an average of $61 on payments to tax professionals and purchasing tax software. All told, it costs Canadians on average of $215 to comply with personal income tax regulations when all the costs, time, and effort associated with preparing tax returns are included Unfortunately, the tax system seems to be getting more complicated and more costly, as shown by the litany of tax credits introduced over the past few years, including the Canada Employment Credit, Child Tax Credit, Textbook Tax Credit, Children's Fitness Tax Credit, Public Transit Tax credit, temporary Home Renovation Tax Credit and First Time Home Buyers' Tax Credit. While Canadians might like the idea of receiving a tax break for different types of activities they undertake, such as putting their kids in sports, it substantially increases the costs of compliance. When total costs associated with preparing tax returns are added up, it costs Canadians between $4-billion and annually to comply with personal income tax regulations.

It doesn't need to be this way. If Canada adopted a flat tax, Canadian taxpayers could complete and file their taxes in about five minutes on a simple, postcard-size tax form. In 2007, Alvin Rabushka, internationally renowned tax expert and University of Stanford professor, developed just that: a flat tax and postcard-size tax return for Canada. A flat tax would simplify Canada's tax code by eliminating nearly all deductions, exemptions, and credits that complicate the current tax system. For individuals, only a few basic calculations would be needed to determine the amount of tax owing or refund due.

At this time of year, as Canadians grapple with our unwieldy and complicated tax code, littered with exemptions for special interests, it's time to give thought to simplifying our tax system. Replacing Canada's personal and business income tax system with a flat tax will save money, make everyone's taxes easier to calculate and strengthen the Canadian economy. Financial Post I Niels Veldhuis is vice-president of research at the Fraser Institute. The Costs of Complying with Personal Income Taxes was released yesterday and is available at fraserinstitute.ca Free trade for Colombia The House of Commons has been trum by subject the NDP to a over temper the tan- past few months as they filibuster to stop passage of the Canada-Colombia Free Trade Agreement (FTA). Ideologically opposed to free trade, the NDP has chosen to base its opposition to the FTA with Colombia on human rights.

I suspect the real reason for the NDP's hissy fit is its socialist anger at the success of free market reforms in Colombia and the subsequent demise of the left wing guerrilla groups there. While it is politically clever for the NDP to present itself to Canadians as noble defenders of human rights battling money-grubbing big business, its core argument is specious and disingenuous in the worst way. The NDP has deliberately chosen to ignore the reality of what things will change for the better in Colombia as it enters into free trade agreements not only with Canada, but also with the United States, the EU and other developed nations. The economic benefits that increased trade with Colombia will provide are not the only reason Canadians should support this FTA. This agreement will help lift the working poor out of poverty.

Canada is a moral, compassionate nation. Canadians care about human rights; we desire to see poverty eradicated around the world. Opponents of free trade with Colombia say Canada shouldn't sign an FTA with Colombia for a plethora of reasons: Union leaders are being assassinated; workers rights are being infringed and the environment in Colombia is under threat from corporate agriculture. During a House of Commons debate on April 19, an opposition MP even stated Canada shouldn't sign the FTA because Colombia's soil is too fragile to withstand the harsh methods of corporate agri-business, as practised here in North America. The NDP links every negative image it can think of to the government and business leadership in Colombia.

It shamelessly implies that most decision-makers are heartless and do not care about their own country. However, the facts on the ground do not match the rhetoric critics use when attacking Colombia. Colombia has been challenged by a long violent past. But both the current BRAD TROST ALFONSO DURIER BLOOMBERG NEWS A free trade deal would benefit Colombian industries beyond just the coffee sector. government and the business community are doing what they can to improve the country.

The Colombian government readily agreed to incorporate human rights, labour and environmental accords into the FTA with Canada. Independently verified surveys indicate that large Colombian businesses give almost of their sales to social and community A trade deal would be good for Colombia and good for Canada projects. (European companies give about 1.5%.) Colombians understand what their country's needs and are prepared to make the changes necessary to improve their lives. Colombia has its own legal and human rights institutions that promote justice and human rights. Are these institutions perfect? No, but when you talk with Colombians who are involved with these institutions (as I have) you understand their willingness to deal with their own internal problems.

Decreased violence, robust electoral participation and an openness to outside scrutiny from the UN and foreign institutions all illustrate that Colombia is turning its future around. Is it appropriate for the NDP and other opposition MPs to deny this country the opportunity for further economic and social advancement? Opponents of FTA also cry that free trade with North America will benefit big business at the expense of low- income workers and subsistence farmers. This line of argument ignores some basic facts about the Colombian sectors affected by this FTA. Thanks to free trade, Colombian textile and apparel goods will be able to enter Canada tariff free. Boosting employment in the textile industry is of particular social importance in Colombia because many workers are head-of-household single mothers who must work to provide for their children.

The need for head-of-household employment is so widespread in Colombia that companies in both the apparel and service industries have adjusted their entire employment strategies to benefit these women. As Canada increases its trade with sectors of the Colombian economy that hire these women, our business decisions will bring real improvement to the lives of Colombia's poor and the economically vulnerable. Free trade in agriculture will also allow the poor and other consumers to purchase foodstuffs at lower prices because tariffs on Canadian wheat, barley, lentils, peas and other crops will disappear. Thousands of small Colombian bakeries will now have the option to buy Canadian flour at the lowest possible price, making food more affordable for all. For critics of the Canada-Colombia FTA to claim to stand for human rights while effectively calling on poor Colombians to pay higher food prices stretches credulity.

Canada will ultimately sign the Canada-Colombia FTA because it is good for our country. We should not be dissuaded from supporting this agreement because of spurious arguments that hinder Colombia's development into a more advanced country. Its poverty rate has dropped to from since 2002. Colombia is successfully defeating both Marxist guerrillas and violent drug lords. This brave, dynamic country should not be punished for its success by protectionist and socialist politicians here in Canada.

Financial Post I Brad Trost is the Conservative Member of Parliament for the riding of Saskatoon-Humboldt and a member of the House of Commons standing committee on international trade, the committee dealing with the Colombian FTA..