The current trade regime is not just a matter of the U.S. exporting manufacturing jobs to China and importing cheaper consumer goods. We are also dramatically increasing the volume of pollution associated with our consumption, so much that a significant part of U.S. pollution is now generated in China in the production of goods for U.S. consumers.
The Bank of Canada would be wise to consider the future we're heading towards. For a petro-economy such as Canada's, where the energy industry and the country's economic well-being are closely linked, the financial risks associated with the pending battle against climate change are much greater than any cyclical downturn in oil prices.
It's tough to find any drivers who relish digging into their wallets to fill up at the pump. According to the International Monetary Fund, though, not only should fuel taxes jump by more than 50 percent, the increase should have Canadians whistling a happy tune. Now, here's the real kicker: The IMF is right.