Guilbeault disputes report on ‘negative economic impact’ of carbon tax
A Parliamentary Budget Office report revealed the carbon tax has a net negative impact in every province but British Columbia and Québec, both of which have a provincial levy in place of a federal tax.
Environment Minister Steven Guilbeault is once again at war with the Budget Office, which says the carbon tax has an “overall negative impact” on household finances, which he disputes.
“The fuel charge lowers employment and investment income,” said the report A Distributional Analysis Of The Federal Fuel Charge: Update. Federal claims that households receive more in rebates than they pay in tax “do not incorporate the loss in employment and investment income from the fuel charge as a distinct cost to the household.”
Update calculated the tax has a net negative impact in every province where it applies, all but British Columbia and Québec, reported Blacklock’s Reporter, noting that those provinces opted out of the federal carbon tax in place of a provincial levy.
“In 2030, taking into consideration both fiscal and economic impacts, we estimate the average household in each of the backstop provinces will see a net cost,” wrote analysts.
The $80 per tonne tax is currently charged at 12¢ per litre of propane, 15¢ per cubic metre of natural gas, 18¢ per litre of gasoline, and 25¢ per litre of heating oil. By 2030, the tax is scheduled to be hiked up to 26¢ per litre of propane, 32¢ per cubic metre of natural gas, 37¢ per litre of gasoline, and 54¢ for heating oil.
The Budget Office on Thursday said net costs per household by 2030 would average $903 per year in Ontario followed by Saskatchewan ($894), Alberta ($697), Manitoba ($693), Newfoundland and Labrador ($652), Nova Scotia ($580), Prince Edward Island ($575) and New Brunswick ($457).
Minister Guilbeault disputed the report’s findings and claimed the carbon tax had lowered greenhouse gas emissions. “Our plan is working,” he said.
“We’ve never seen in our history before emissions go down at a time of full economic growth in this country,” he pressed. “This has never happened before.”
On April 1, 2023, the minister said some Canadian households pay more carbon tax than they get in rebates. "If you do the average … it's going to cost more money to … the richest among us, which is exactly how the system was designed," he told CTV News in an interview.
The top 60% of households paid more tax than they received in rebates last fiscal year. For the 2024/25 fiscal year, only the lowest quintile receives a net rebate.
A Department of Environment manager had previously told MPs during a parliamentary committee hearing that the carbon tax has had minimal impact on greenhouse gas emissions. It reduced emissions by 1% to date, claimed assistant deputy minister John Moffet.
Environment and Climate Change Canada in its last National Inventory Report to the United Nations on May 2 said emissions rose by 9.3 million tonnes in 2022, which reflects the most recent available data.
Environment Commissioner Jerry DeMarco then said the Trudeau government has never met an emissions target. Canada is the only G7 country yet to achieve any emission reduction since 1990.
In a 2023 report Emission Reductions Through Greenhouse Gas Regulations, DeMarco depicted federal climate programs as guesswork.
Minister Guilbeault at the time promised to do better. “We continue to work to refine our reporting,” he said. “In the meantime, as they say, the proof is in the pudding.”
“We haven’t had any reductions,” DeMarco once told the Senate energy committee. “We are up 14 percent since 1990.”
The Budget Office also received a gag order earlier this year on all information from his office concerning the carbon tax. “We’ve been told explicitly not to disclose and reference it,” Yves Giroux testified before the finance committee.
The federal government has spent about $200 million administering the carbon tax in Canada, according to records obtained by the Canadian Taxpayers Federation.
On Thursday, Guilbeault dismissed the Budget Office calculation that the economic impact of the carbon tax cost households overall. “When you look at the household costs, you’re paying more,” said a reporter: “Do you agree with that?”
“That’s not what this report says,” replied Guilbeault.
The environment minister has repeatedly claimed most Canadians profit from the tax by pocketing larger rebates than they pay in higher fuel charges. “People get more money back,” Guilbeault told the Commons October 1.
Alex Dhaliwal
Calgary Based Journalist
Alex Dhaliwal is a Political Science graduate from the University of Calgary. He has actively written on relevant Canadian issues with several prominent interviews under his belt.