Carbon tax to cost economy $12 billion this year: report

Data modelling by Environment and Climate Change Canada estimates per capita costs for the carbon tax at $295 per person. That is set to more than double by 2030.

Carbon tax to cost economy $12 billion this year: report
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The carbon tax is expected to cost the Canadian economy at least $12 billion this year, according to the Canadian Taxpayers Federation (CTF).

“The government’s own data shows the carbon tax costs our economy billions of dollars every year,” said Franco Terrazzano, CTF Federal Director. “Prime Minister Justin Trudeau should immediately make life more affordable and help the economy by scrapping his carbon tax.”

Data modelling by Environment and Climate Change Canada (ECCC) estimates per capita costs at $295 per person. The department mapped out costs of the carbon tax from 2018 through 2030.

The economic cost is the difference between what GDP would be without the carbon tax minus the projected GDP with the carbon tax, says the CTF.

At the end of the decade, the carbon tax will cost the Canadian economy $30 billion, or an estimated $678 per person based on Statistics Canada population projections. 

Other government data says Canada’s GDP will fall $25 billion in 2030 due to the carbon tax.

Ontario will be on the hook for $4.1 billion this year, followed by Quebec ($3.2 billion), Alberta ($1.8 billion), British Columbia ($1.7 billion), and Saskatchewan ($476 million). Only the Northwest Territories is expected to benefit from the tax to the tune of $15 million.

“The carbon tax costs Canadians big time for gas, home heating bills and everything else,” Terrazzano said. “And the carbon tax is a huge drag on the Canadian economy that we just can’t afford.”

Parliamentary Budget Officer Yves Giroux, who reviewed government data on the carbon tax, confirmed a gag order had been placed on all information from his office.

“The government has economic analysis on the impact of the carbon tax itself and the [output-based pricing system],” he testified before the finance committee.

“We’ve been told explicitly not to disclose and reference it,” Giroux said.

The federal government has spent about $200 million administering the carbon tax in Canada, according to separate records obtained by the CTF.

The environment department has been faulted time again for not explaining the impact of carbon taxes and other measures. 

Associate Deputy Environment Minister, Lawrence Hanson, said the carbon tax only reduced emissions by 1%. Minister Steven Guilbeault pledged to do better. 

But Terrazzano says Canadians have had enough. “Trudeau should stop wasting money, stop punishing Canadians and scrap the carbon tax,” he said. 

A 2023 report, Emission Reductions Through Greenhouse Gas Regulations, depicted federal climate programs as ‘guesswork’.

“The federal government does not know whether it is using the right tools to reduce emissions,” wrote Environment Commissioner Jerry DeMarco. “Solutions exist,” he said, but they are being implemented “much too slowly.”

The National Inventory Report released on May 2 confirmed emissions in 2022, the most recent available data, increased 9.3 million tonnes year over year to 708 million tonnes. Emissions last declined in 2020 due to pandemic lockdowns.

Statistics Canada and Simon Fraser University's Canadian Energy and Emissions Data Centre data show Canada produced 738 megatonnes of carbon emissions in 2020.

National Inventory figures showed only Alberta and Saskatchewan had emission declines year over year. Both provinces have opposed the carbon tax as costly and ineffective.

Commissioner DeMarco told the Senate energy committee last year that Canada’s emissions are “up 14 percent since 1990.”

“Canada is the only G7 country that has not achieved any emission reduction since 1990,” he said. “That needs to change now.”

The carbon tax is currently worth 12¢ per litre of propane, 15¢ per cubic metre of natural gas, 18¢ per litre of gasoline, 20¢ per litre of aviation fuel and 25¢ per litre of heating oil. A 23% increase is due next April 1.

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