Usage Tax/User Fees

I am writing this while sitting inside a public library, which I partially pay for this public library through the government’s various taxing schemes. In certain angle, I guess you can say that I don’t pay to use the service but I have faith in the way tax revenues are divvied up and presume that the right portion of money is going to the public library system.

I am familiar with the concept but I am new to the term Extended Producer Responsibility (EPR), thanks to C.D. Howe Institute’s The Eco-Fee Imbroglio. Summarily, the concept suggests that a financial cost more representative of the true environmental cost to an economic activity should be borne by all the parties involved in the transaction, namely the manufacturer, retailer and user. This will ensure all parties consider the entire life cycle of the product, as well as the product that the new one is replacing. When this financial cost is passed down onto the consumers, I call this a usage tax/user fee.

Personally, I have no issues with user fees and in fact I believe this to be a useful tool to quantify consumer’s desire for a product or service. Some years ago, I was prompted by my telecommunication service provider to switch over to paperless invoices and bills to be environmentally friendly and the alternative was to pay a small fee to continue receiving paper copies. It was a no-brainer for me. However, years now since I switched, I still know people that are dubious of this offering and whether the money collected for paper copies are used as a revenue tool or as means to promote positive environmental behaviour. That becomes a matter of trust I guess.

One of the ways to increase effectiveness is to ensure that a user-fee program is participated by a majority of the companies within a sector. I believe this is a constructive way to increase the integrity of the program and to ensure customers that the revenue received is going to a stewardship fund, a environmental protection trust, etc.

I would highly recommend that all readers interested in this topic to go through the article from C.D. Howe as it provides numerous recommendation from the previous incarnations of user fee regimes.

As always, all questions and comments are welcomed.


About eatonkwan

Engineer by profession, interests lie in environmental development, LEED and sustainable development.
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