Atlantic premiers say carbon tax will 'disproportionately' impact Eastern Canadians

Gas prices across the Maritimes jumped several cents per litre in late May. On July 1, the carbon tax will mean even higher costs at the pumps — as much as 10 cents per litre more.

Atlantic premiers say carbon tax will 'disproportionately' impact Eastern Canadians
THE CANADIAN PRESS/Andrew Vaughan
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Gas prices across the Maritimes jumped several cents per litre in late May. On July 1, the carbon tax will mean even higher costs at the pumps — as much as 10 cents per litre more.

"We're already dealing with a high cost of living," said P.E.I. Premier Dennis King. "We have a lot of factors that are working against us, and we can ill afford to see a higher price paid by Islanders, or Atlantic Canadians, at the pump."

The Atlantic Canada premiers claimed the carbon tax disproportionately impacts their residents.

On April 6, the Parliamentary Budget Office (PBO) updated its federal carbon tax report from March 2022 to include Atlantic Canada. On average, most residents and households will pay more carbon tax than they receive in climate rebates.

"Most households will be worse off when considering this slightly lower economic activity," said PBO Yves Giroux. "Only the bottom quintile is better off, but everybody else is likely worse."

He contends Nova Scotia families from the lowest earning quintile would receive $226 in federal rebates. In contrast, the highest earners would pay $4,368 annually in 2030/31. A similar family from Newfoundland and Labrador would receive $689, with the province's highest earners paying $4,872 in 2030/31.

In 2019, the federal government introduced a price on carbon pollution, starting at $20 per tonne and increasing to $50 per tonne in 2022. On April 1, Ottawa expanded the tax to $65 per tonne with successive increases planned until 2030, when it reaches $170 per tonne.

Despite the rebate payments offered by the federal government to offset the surcharge, Environment Minister Steven Guilbeault told CTV on April 2 that "on average, households will pay more" because of the $65 per tonne carbon tax.

"If you do the average, yeah, it's true, it's going to cost more money to people, but the people who are paying are the richest among us, which is exactly how the system was designed," he said. "The rich pay more for their carbon consumption and pollution, and we're supporting, through the transition, middle-class Canadians and low-income Canadians."

The PBO report assumes that higher-income households will use more energy since they have larger homes, possess more than one vehicle and tend to travel more.

By 2030, the PBO's report estimates the net cost of the carbon tax — taking into account fiscal and economic impacts — will be $1,513 on average for Nova Scotians, $1,521 for Islanders and $1,316 for Newfoundlanders.

That counters what Prime Minister Justin Trudeau said at a March 14 press conference. He said the average family of four in Bridgewater, Nova Scotia, would receive a climate action incentive cheque worth $272 every three months.

"We're fighting climate change while standing up for families and growing the economy through pollution pricing. That's over $1,000 a year and more than makes up for the extra costs because of the carbon price," he told reporters. "This is how you fight climate change."

New Brunswick announced it would scrap its provincial plan to opt into the federal program last month, but Giroux did not mention them in the report.

On March 30, Conservative leader Pierre Poilievre accused Ottawa of spreading falsehoods on the carbon tax, who also "misled the people of Atlantic Canada with this sneaky tax."

Guilbeault's parliamentary secretary addressed Poilievre's concerns, claiming eight out of 10 families would be better off under the federal regime — $1,000 for Nova Scotia and P.E.I. families and $1,300 in Newfoundland and Labrador.

However, the PBO calculations determined the average household in those provinces will pay $431, $465 and $346 more in taxes this year than they receive in rebates. Giroux said Ottawa is not accounting for the higher cost of business and the job displacement caused by higher taxes.

"It's just looking at this issue from one angle," he said. "When you look at the other aspects, the broader impact on the economy, and the related impact on the household, then I think it's a more accurate picture of the overall cost borne by households."

"We have said that the rebates would help the people most in need in Canada, and that's what the system is doing," said Guilbeault.

The environment minister said Ottawa is doing other things to mitigate the cost of climate change and help people transition to a lower carbon economy, citing the incentive programs to purchase electric vehicles and home energy retrofits to reduce home heating costs.

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