The “Eco Fee” is a Tax

Mr. Horsnell's letter ("Concerns over eco fees", July 16) has its heart in the right place, but he makes the problematic claim that the "eco fee" is not a tax. If the government compels payment to itself, we call it a tax. When a government takes from Peter to give to Paul, we call the compelled payment a tax. If the government compels Peter to pay Paul directly, what has happened here? Essentially, the government has granted Paul the power to tax. In this case, "Paul" is Stewardship Ontario.

Since the rationale for this tax is the need to divert waste from landfills, the tax is intended as a disincentive at the consumer level. However, we are told this is not a tax because manufacturers and retailers can choose to absorb this "fee" at their own expense. So, while this fee is equivalent to a tax from the manufacturing and retailing perspective, the cost of this tax will only be passed to the consumer by them voluntarily, and is therefore a fee. The problem with this convoluted explanation is clear.

By this standard, the former PST, the GST and the current HST are not taxes, but "fees" since a merchant could always, and often does, absorb these costs on their own. How many times have we been exposed to that "pay no GST" marketing gimmick, or paid a discounted price for an item that essentially waived the sales tax? A tax is a tax. The "eco fee" is mandated by the government, and that makes it a tax regardless of who ultimately pays it.

The more interesting question is: Why the intense effort to deny this is a tax? Could it be that no one wants to think of Stewardship Ontario as a recipient of legalized graft? Or could it be the need to pretend that the government is developing market based solutions to waste management, when in reality it is forcing the taxpayer to finance a massive jobs program for the eco-industry?