Guilbeault admits that typical households will pay more carbon tax than they receive in rebates

This week, a Parliamentary Budget Officer (PBO) report says most households will see a net loss when the carbon tax reaches $170 per tonne in 2030.

  • Rebel News
  • April 06, 2023
  • News
Guilbeault admits that typical households will pay more carbon tax than they receive in rebates
The Canadian Press / Adrian Wyld
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Environment Minister Steven Guilbeault admitted that Canadian households pay more carbon tax than they get in rebates after years of his government claiming otherwise. It increased on April 1 from $50 to $65 per tonne, notably increasing gas prices from 11.05 cents to 14.31 cents per litre.

This week, a Parliamentary Budget Officer (PBO) report said that most households will see a net loss when the carbon tax reaches $170 per tonne in 2030.

In 2019, Ottawa introduced a price on carbon pollution, starting at $20 per tonne and increasing $10 in successive years to $50 per tonne in 2022. They intend to expand the tax with subsequent increases of $15 until 2030 when it reaches $170 per tonne.

According to The Toronto Sun:

'When both fiscal and economic impacts of the federal fuel charge are considered, we estimate that most households will see a net loss,' said PBO Yves Giroux in a statement. 'Based on our analysis, most households will pay more in fuel charges and GST — as well as receiving slightly lower incomes — than in Climate Action Incentive payments.'

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

According to Giroux, "the net cost for an average household in Ontario this year will be $478, rising annually to $1,820 in 2030." Since it is a progressive tax, the top 60% of households pay more tax than they receive in rebates, while the bottom 40% receive more refunds than they pay — switching to only the bottom 20% in 2024/25.

"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," said Guilbeault.

"The rich pay more for their carbon consumption and pollution, and we're supporting, through the transition, middle-class Canadians and low-income Canadians, and that's exactly what we're doing."

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

Guilbeault 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.

"This is another way we're helping Canadians reduce their environmental impact, but also their overall energy costs," he added, claiming the PBO's report does not consider the total cost of climate change.

Guilbeault also said the report fails to "account for economic opportunities that come with driving cleantech innovation" and referenced Budget 2023, which earmarked funds for clean energy.

"That's like a business calculating their revenues by looking only at one side of their ledger book," he said of the PBO report.

Moreover, the carbon tax frustrated Ontario Premier Doug Ford, citing added costs to taxpayers amid the need for widespread tax relief. 

"The carbon tax is killing people," said Ford, adding he did not support the federal government increasing the carbon tax to $65 per tonne.

According to the PBO, the lowest quintile in Ontario will receive $241 this year, rising to $408 in 2030. However, the top 20% will owe $1,888 this year, rising to $4,449 in 2030.

On Wednesday, Guilbeault said he found Ford's comment "incredibly rich coming from a premier who has no plan to fight climate change." Ford called the environment minister a "real piece of work."

"I didn't say that Ontario wasn't doing anything," clarified Guilbeault on CTV's Question Period. "I said that the Ontario government has no climate plan, which is true, and they've admitted as much themselves."

He considers a "plan" with measures with targets and progress reporting.

According to an independent climate institute, Canada's carbon emissions increased in 2021 but remained below pre-pandemic levels. However, emissions fell 2% per unit of GDP compared to 2020.

The Canada Climate Institute estimates federal 2021 emissions at 691 megatonnes, owing to activity across various sectors and oil and gas production levels. Statistics Canada and Simon Fraser University's Canadian Energy and Emissions Data Centre said Canada produced 738 megatonnes of carbon before the COVID pandemic.

Ottawa's climate modelling from Budget 2021 unveiled a national emissions reduction of 36% below 2005 levels in its climate policy forecast — the benchmark year for Canada's 2030 climate targets per the Paris Climate Accord. However, that falls short of their commitment to reducing emissions by 40% to 45% over the next decade.

The federal government intends to reduce emissions by about 440 megatonnes by 2030 and achieve net zero by 2050.

But the energy and climate think-tank Pembina Institute concluded that no government will meet its 2030 or 2050 net-zero goals, as provinces and territories did not include 95% of emissions generated in Canada in their respective 2030 target or climate plans.

"No jurisdiction has developed pathways to describe how net zero can be achieved," reads the All Hands on Deck report.

Canada Carbon Tax Liberal Party of Canada Steven Guilbeault news
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