GST on carbon tax will cost Canadians half a billion dollars this year: report

The Trudeau Liberals are expected to collect nearly half a billion dollars in GST on the carbon tax this year, contradicting the claim that it is 'revenue neutral.'

A federal briefing note by the Parliamentary Budget Office (PBO) says exempting the carbon tax from the GST would reduce federal tax revenues by $486 million in 2024. By the end of the decade, revenues would total $1 billion, reported Blacklock’s Reporter.

On a provincial basis in decreasing order, GST charges will cost $182 million in Ontario this year followed by Alberta ($96 million), Québec ($77 million), British Columbia ($58 million), Saskatchewan ($29 million), Manitoba ($18 million), Nova Scotia ($10 million), New Brunswick ($7 million), Newfoundland and Labrador ($6 million) and Prince Edward Island ($1 million).

On Tuesday, the Canadian Taxpayers Federation (CTF) called on the Trudeau Liberals to axe its tax-on-tax and save Canadians hundreds of millions annually.

"Prime Minister Justin Trudeau and his ministers are having a retreat in Montreal trying to figure out how to make life more affordable," said Franco Terrazzano, CTF Federal Director. "Here’s an idea: they could save Canadians real money right now by picking up the PBO report and ending their tax-on-tax," he added.

The carbon tax costs the average family upwards of $710 a year after rebates, according to a separate PBO report

Moreover, Finance Minister Chrystia Freeland has repeatedly claimed that her government earns no revenue on the carbon tax. 

"Our price on pollution is revenue neutral," she told the Commons in 2022. "All the money goes back to Canadian families."

Freeland repeated the claim in the finance committee that year. "The money is returned directly to Canadian families," she said.

Last October 4, Conservative MP Alex Ruff sponsored Bill C-358, An Act To Amend The Excise Tax Act, to eliminate GST charges on the carbon tax.

Parliament in 2017 defeated identical legislation denoted Bill C-342, An Act To Amend The Excise Tax Act, that proposed a GST holiday on any “tax, duty or fee imposed in respect of carbon.” It lost on Second Reading by a 205 to 85 vote.

"It is wrong and unfair to charge taxes on taxes," MP Mike Warawa said at the time. "Canadians understand that. Unfortunately, many in this House do not."

"The federal Liberal government will be collecting billions of dollars of new taxes, charging GST and HST on top of the price of carbon, which is a tax on a tax," he added. "This is not fair."

On April 1, Ottawa will expand the carbon tax to $80 per tonne, with successive $15 increases planned until 2030, when it reaches $170 per tonne. That amounts to a 17-cent carbon tax per litre of gasoline this year, followed by 21 cents for diesel and 15 cents per cubic metre of natural gas. 

"Ending the tax-on-tax would save Canadians every time they fuel up to go to work and heat their homes during the cold winter months," said Terrazzano. "Trudeau can and should make life more affordable by ending the tax-on-tax and scrapping his carbon tax."

This is a developing story.

Alex Dhaliwal

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