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TOP STORY
After an April 1 hike to the federal carbon tax, Environment Minister Steven Guilbeault has been claiming that the increase represents a net benefit to Canadians in the form of higher rebates.
But a cursory analysis of the evidence shows that the carbon tax — just like most taxes — will indeed have the net effect of subtracting money from the citizenry.
On Saturday, the federal tax on carbon rose to $65 per tonne of emissions, up from $50 the year before. It’s the largest single hike to the tax since emissions pricing was first introduced in 2019 at a rate of $20 per tonne.
In provinces without their own in-house carbon pricing system, the April 1 increase will work out to an extra four cents per litre of gasoline, for a total of 14 cents of carbon tax per litre.
As they’ve done on previous April 1 rises to the carbon taxes, the Trudeau government is claiming that — thanks to rebates — “most” Canadian households will get back more from the carbon tax than they pay in.
In the next fiscal year, an estimated $11.8 billion collected as carbon tax will be sent back to the public in the form of the Climate Incentive Action Payment (CAIP); an automatic quarterly benefit designed to “offset the cost of the federal pollution pricing.”
“Thanks to pollution pricing rebates, average Canadians will get more back than they pay,” wrote Guilbeault in a Sunday tweet.
The claim is based on the notion that wealthy households consume more fossil fuels — and thus pay more carbon tax — than average households. So a Nova Scotia senior receiving their quarterly CAIP payout of $124 will probably end up receiving more in rebates than they pay in carbon taxes, while his neighbour with a boat, a Hummer H2 and an annual trip to Las Vegas will take a net loss on the program.
But a recent review by the Parliamentary Budget Officer found that, even with rebates, the average Canadian’s experience of the carbon tax will be a loss of household income.
“We estimate that most households will see a net loss, paying more in fuel charges and GST, as well as receiving lower incomes, compared to the Climate Action Incentive payments they receive and lower personal income taxes they pay,” it reads.
The PBO report found that if the carbon tax is examined in isolation, it does indeed have the effect of benefiting “most” Canadian households while hosing the wealthy ones.
But taxes of any kind can pretty reliably be expected to generate unintended consequences.
And by making fuel and heating oil more expensive, the PBO analysis says that the tax will slow down the Canadian economy, depress wages and shrink overall incomes. There’s also the fact that GST is charged on top of the carbon tax – an expense that isn’t factored in to CAIP benefits.
The economic damage wrought by pricier fuel won’t be overwhelming, but the PBO estimated it would be enough to cancel out the benefits of rebates for almost every Canadian income group.
Once GST and the “economic impacts” were plugged in, it showed that a minority of Canadian households were still in a position to “get more back” from carbon pricing.
When Guilbeault was questioned on the PBO report during a weekend CTV interview, he said it didn’t account for “other things” the government was doing to transition Canada to a “lower carbon future.”
He also criticized it for failing to account for the costs of climate change, citing the $17 billion in damage caused by B.C.’s 2022 wildfire season.
While the 2023 hike is the largest increase in the carbon tax to date, it is set to continue increasing by an extra $15 per tonne every April 1 until eventually reaching $170 per tonne by 2030, at which point carbon taxes will represent about 37 cents per litre of Canadian gasoline.
IN OTHER NEWS
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Canada’s “random stabbing” problem has gotten so bad that a terrorist attack may have happened without anybody immediately noticing. On Saturday, a man slashed the throat of a fellow passenger aboard a Surrey, B.C. bus in an unprovoked attack. While trying to kill a stranger for no reason used to be a prime indicator for terrorism, the Surrey attack was only the most recent incident in a Canada-wide crisis of people being stabbed in unprovoked attacks, often on public transit. So, while the Surrey attack was initially described by police as a stranger attack, after some deeper investigation they laid terrorism charges after surmising that the attacker may have been motivated by militant Islamism.
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The National Post’s Bryan Passifiume just found outthat there are so many dead rodents in the walls of Canada’s official prime ministerial residence that it’s started to affect the interior air quality. How did he find this out, you may ask? Although the home has been shuttered since November, the National Capital Commission will still host the occasional garden party on its grounds. Well, at one of these parties a tornado warning suddenly hit the area, prompting panic among officials that attendees would try to shelter within the abandoned home, potentially putting themselves at greater danger than whatever weather problems existed outside. It’s “a risk we can’t accept,” reads an internal report obtained by Passifiume.
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