Building common wealth aligns our incentives for a more sustainable future.
By charging those who use and pollute Canada’s shared natural resources, we create incentives to protect nature and steward our scarcest resources for all future generations. This value could be rebated back to all Canadians through Common Wealth Dividends of up to $7,600/year per adult, or eliminating all federal personal income taxes and have enough left over to rebate everyone $2,000/year.
Key Takeaways
Aligning incentives to protect nature: We can charge those who use and pollute the environment to encourage conservation and more efficient use of our scarce resources.
Common Wealth Dividends: This value can be rebated back to all Canadians through monthly dividends and lower income taxes, leaving most people better off while conserving the environment. This is not a new idea — Canada’s carbon rebate is an existing Common Wealth Dividend that works.
Less urban sprawl, more sustainable cities, through a land value tax: A land value tax encourages higher density urban land use, leading to less sprawling development, more environmental conservation, and a more sustainable economy.
Aligning incentives to protect nature
Environmentalist and entrepreneur Peter Barnes once pondered the question: ‘Who owns the sky?’, to which he answered ‘Well if anybody owns it, it’s all of us together.’
We have a joint responsibility as citizens to preserve the stability of our environment and to steward our scarcest resources for future generations. Common Wealth advocates for charging those who use and pollute the environment — our air, land, and all of our scarcest natural resources — the same way we pay to use electricity, water, and other natural resources. This would allow us to harness market forces to achieve more environmental sustainability, reduce pollution, and build a system where our markets work to protect and preserve nature, rather than destroy it.
We could rebate this value back to us through Common Wealth Dividends while freeing Canadians from income tax, making us all equal beneficiaries of the environment.
Building common wealth that pays us dividends, funded from sources that we can morally justify an equal claim to, is a path to shared prosperity in an era of increasing extreme wealth inequality, environmental degradation, and polarization of jobs, lives, and quality of life. (Read more in our Common Wealth Dividend page.)
Paying dividends from our common wealth is not just an idea — it’s already working in Canada today.
Canada’s Carbon Rebate: Air as common wealth
Canada’s carbon rebate, available in certain provinces as the “Climate Action Incentive”, is a shining example of a Common Wealth Dividend that leaves most families better off while promoting greater environmental sustainability. The carbon rebate reflects a shared understanding that air is part of our common wealth, and those who wish to pollute must pay.
Carbon fees are generally considered one of the most economically efficient ways to raise public revenue, while reducing greenhouse gas emissions and driving innovation in sustainability. Our carbon rebate returns the fee as a universal dividend paid directly back to us, which not only helps to reduce emissions, but creates jobs and strengthens our economy thanks to the steady economic stimulus of regular, unconditional cash.
While there are many ways a government could reinvest carbon fee revenues, research shows that rebating it right back to people leaves more families better off. Indeed, Canada’s carbon rebate returns nearly 100% of carbon fees back to Canadians and leaves a majority of households with more money. Rather than making life more expensive, the rebate delivers a net financial benefit to most Canadians, especially to low-income households who need it most.
Paying dividends from carbon pollution is not only effective, it’s politically popular: a majority of Canadians support carbon pricing if the money is returned directly to them. Polls show that simply framing the carbon price as a ‘dividend’ or ‘levy’ increases public support.
The carbon rebate shows that paying everyone a dividend from our commons is both economically and politically feasible. We can expand this rebate into Common Wealth Dividends by collecting value arising from all of earth’s shared natural wealth — land, air, water, natural resources— and build incentives towards greater sustainability and preserving the environment for future generations.
Less urban sprawl, more sustainable cities through a land value tax
A tax on land value encourages landowners to be put to its highest use, incentivizing higher density developments near urban centres, and reducing demand to develop outside cities. A land value tax makes it more profitable to build and lobby for zoning change than to keep it underutilized. While property tax penalizes building value and improvements, a land value tax discourages idle land speculation and the underuse, waste, and sprawling development of sites. (Read more in our Housing page.)
Urban sprawl has been correlated with more pollution, energy use, and traffic congestion, as infrastructure is spread out over more land. The associated increase in environmental footprints of metropolitan areas leads to the destruction of wildlife habitats and the fragmentation of remaining natural areas.
As people live further away from city centres, they need to travel further to access jobs (yellow and green below), making our cities less sustainable and energy-efficient:
When neighbourhoods are made off-limits to multi-family housing and infill development, the only options left are to build car dependent neighborhoods on greenspace, or up into carbon intensive concrete and steel based towers. We cannot make progress on climate change without progress on housing. — More Neighbours Toronto
Ontario loses 175 acres of farmland a day to urban development, equivalent to 5 family farms each week with some of the country’s best-quality soil, which affects opportunities to grow locally and could ultimately harm the food sovereignty of local communities. Encouraging higher density in urban centres would relieve pressure to build over valuable farmland, while also reducing demand to develop over preserve lands, like the Ontario Greenbelt.
A land value tax would reduce reduce sprawl and encourage better use of land near cities, promoting environmental conservation, more affordable housing, and a more energy-efficient economy.
A greener planet through building common wealth
By charging for the use and pollution of our environment, we can better align the incentives in our society to preserve and steward our collective resources, rather than squander them.
Canada’s carbon rebate shows that Common Wealth Dividends work. We can expand these dividends to include value collected from all of our shared, natural and co-created wealth, helping us build a greener and more sustainable future for all.
Natural Common Wealth and Economic Rent in Canada
In this paper, we estimate the total economic rents (or unearned profits) from Canada’s land and natural resources that could be collected as new revenue, without inhibiting productive investment. At $241 billion/year, it could be enough to raise the 0% personal income tax bracket to $250,000/year or generate a dividend of $7,600/year per adult.
