Feds admit carbon tax costs billions a year, isn’t revenue neutral

Environment Minister Steven Guilbeault released data confirming the carbon tax is a net cost for the economy. The Department of Environment says the tax will cut economic production by up to $30 billion annually.

Feds admit carbon tax costs billions a year, isn’t revenue neutral
The Canadian Press / Spencer Colby
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Federal data released Thursday contradicted the claim that the carbon tax is revenue neutral.

Environment Minister Steven Guilbeault released data confirming the carbon tax is a net cost for the economy, reported Blacklock’s Reporter.

“This analysis does not take into account the benefits of investing to fight climate change,” Guilbeault told reporters after the figures confirmed past Budget Office findings that the tax costs tens of billions a year.

The Department of Environment in Data Mart contends the carbon tax will cut economic production by some $20 to $30 billion annually. 

When Parliament introduced the federal tax regime in 2018, it pledged a revenue neutral tax. Nearly 89% of the proceeds ($11.4 billion) were returned to households through rebates. 

Rebel News earlier reported that Ottawa allocated a meagre 7% ($2.5 billion) of revenues to small and medium-sized businesses committed to reducing their emissions. However, there is no mechanism in place to rebate businesses. 

“How can you continue to claim that the carbon tax is ‘revenue neutral’ and that funds will be returned to the province in which they were collected when you have failed to return $2.5 billion over five years?” said Alberta Environment Minister Rebecca Schulz.

“Increases in the carbon tax, coupled with minimal compensation, made the cost of doing business substantially higher, negatively impacting thousands of businesses,” added the report Fueling Unfairness: Carbon Pricing And Small Business.

Three in five small businesses incurred 10% higher energy costs last year for similar usage, according to the Canadian Federation of Independent Business.

Minister Guilbeault previously pledged to explain the impact of these taxes better. He claimed Thursday that fighting ‘climate change’ will “avoid $23 billion of climate impacts.”

Opposition MPs ridiculed the insinuation that reduced economic output is a consequence of cutting emissions.

“How many fewer droughts have we had as a result of the carbon tax?” asked Conservative MP Michael Kram in the House of Commons. “How many fewer floods have we had as a result of the carbon tax?”

Department of Environment managers earlier admitted it had minimal impact in reducing emissions.

Figures showed only Alberta and Saskatchewan had emission declines year over year; both provinces oppose the carbon tax as costly and ineffective.

The figures were released Thursday — moments before a Conservative motion had been tabled to compel the release of all carbon tax data.

“It had to be pulled out like a rotten tooth, and rotten it is: $20 billion per year in lost GDP as a result of the carbon tax,” Poilievre told the Commons. “That works out to $1,200 per family in extra annual costs.”

Budget Officer Yves Giroux confirmed cabinet quietly placed a gag order on all carbon tax data from his office. 

Cabinet for years has claimed the tax is revenue neutral despite several agency reports claiming otherwise.

A 2018 Budget Office report predicted the carbon tax would cut economic production by at least 1.5%. “The federal government’s carbon pricing levy will generate a headwind for the Canadian economy,” said the report Costing Budget 2018 Measures.

The Bank of Canada in a 2022 report Transition Scenarios For Analyzing Climate-Related Financial Risk also predicted the carbon tax could “lower global demand for Canadian goods and services which weighs on Canadian exports, GDP and inflation.”

It said the cost of carbon taxes are passed on to consumers, leading to higher prices for goods and services.

Conservative MP Philip Lawrence asked the Bank of Canada governor, Tiff Macklem, how long it would take to reduce inflation if the carbon tax was axed. Macklem said one year.

In June 2019, then-Environment Minister Catherine McKenna said her government planned no further carbon tax hikes after 2022, despite the price of carbon per tonne expected to triple by 2030.

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