PBO accuses Liberals, Conservatives of 'political spin' on carbon tax

The Liberals campaigned on the 'affordability' of the carbon tax in 2019 and 2021, whereas the Conservatives campaigned heavily on scrapping it because they claimed the feds lied about the rebates.

PBO accuses Liberals, Conservatives of 'political spin' on carbon tax
THE CANADIAN PRESS/Adrian Wyld; Facebook/ Steven Guilbeault
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Canada's Parliamentary Budget Officer (PBO) continues his one-man crusade against Ottawa over the federal carbon tax and what he describes as the feds' selective use of facts.

PBO Yves Giroux started a political firestorm last week with his report on the progressive tax. He said the economic impact of the tax on job growth and incomes demonstrates that 80% of families across Canada will see a "net loss" under the program.

"We estimate that most households will see a net loss, paying more in the federal fuel charge and GST, as well as receiving lower incomes, compared to the Climate Action Incentive payments they receive," said Giroux. 

The PBO said Nova Scotia families from the lowest earning quintile would receive $226 in federal rebates, whereas the highest earners would pay $4,368 annually in 2030/31. A similar family from Newfoundland and Labrador would receive $689, with the province's highest earners paying $4,872 in 2030/31.

The Liberals campaigned on the 'affordability' of the carbon tax in 2019 and 2021, whereas the Conservatives campaigned heavily on scrapping it because they claimed the feds lied about the rebates.

Canadian families will have to pay up to $847 extra through the federal carbon tax despite rebates. 

"The Parliamentary Budget Officer shows politicians are using magic math to sell their carbon tax," said Franco Terrazzano, federal director of the Canadian Taxpayers Federation.

"The PBO is clear: the carbon tax costs families hundreds of dollars more than the rebates they get back," he said.

Giroux denounced both arguments, stating that Liberals and Conservatives can't pick and choose which part to discuss.

"Anything we do concerning addressing or trying to curb climate change will have costs. It's either a cost to the carbon tax or regulations to reduce the use of fossil fuels. Regulations also have a cost. Doing nothing would also have costs."

According to Giroux, raising the carbon tax to $170 per tonne by 2030 would reduce emissions by 96 million tonnes more than $50 a tonne — equivalent to what 21 million passenger cars emit annually.

The PBO also completed an analysis on the cost of climate change, which said the GDP fell 0.8% in 2021, amounting to between $20 billion and $25 billion less revenue. It said the GDP falls 0.08% yearly, even if the government gradually implements policies to counter its impact.

However, he admits that Ottawa has yet to prove the impact on reducing emissions to Canadians, as the analysis is still underway. Environment Minister Steven Guilbeault realized their messaging about climate change and the carbon tax needs to be sharper.

"I think we need to do a better job communicating on climate change," Guilbeault said in an interview. He pledged Environment Canada will roll out better messaging by late spring or early summer.

Earmarked as Canada's "largest climate awareness campaign," Guilbeault said he would have answers on what climate change has already cost Canadians, what it could keep costing, and what Canada can do to limit it.

According to Blacklock's Reporter, Environment Canada spent $79,015 polling residents on how best to describe climate change. Among the terms "climate change," "extreme weather," or "climate crisis," their report posted inconclusive results.

"Preference was split between 'climate change' and 'climate crisis,'" it said. Guilbeault clarified his government "[wants] to help people understand."

Ontario Liberal MP Lloyd Longfield has since demanded the PBO rewrite its report, claiming that Giroux needs to consider the unrealized "costs of climate change." 

“I was… deeply perplexed… when I read in your distributional assessment of the federal fuel charge that the PBO analysis 'does not attempt to account for the economic and environmental costs of climate change,'" wrote Longfield. 

He wants Giroux to properly contextualize the carbon tax alongside the costs of other policies to regulate lower emissions and the economic benefits of investing in low-carbon industries.

Giroux said it's up to those reading or discussing the report to put it into context, adding, "I am concerned at times about looking at just one aspect of the report."

In his letter, Longfield attributed repeated droughts, wildfires, and floods in California to higher food costs, including lettuce, strawberries and broccoli. However, critics state the carbon tax is what is causing a cost hike.

According to an April 2021 brief by the Canadian Security Intelligence Service (CSIS), climate change "presents a complex, long-term threat to Canada's safety, security and prosperity outcomes." CSIS anticipates more frequent pandemics with the loss of biodiversity and habitats, more arable land lost to pollution, human use and desertification, and depleting freshwater resources from environmental degradation.

"Such a study should also include recognition of the economic benefits that pollution pricing induces through energy-saving measures such as installing electric heat pumps to replace oil furnaces in homes, or the lifetime cost savings of owning a Zero Emission Vehicle compared to an internal combustion engine, or a myriad of other fuel-saving measures across the economy," continues Longfield.

"To ignore these things does a disservice to the discussion."

Giroux said his report clearly states caveats and the limitations of the carbon tax "as [clearly] as possible." He added that if some individuals or groups use the report and spin it a certain way, it's up to them to explain why."

University of Calgary economist Trevor Tombe said carbon taxes permit consumers and businesses to determine what works best to address carbon emissions.

Last month, Clean Energy Canada said Canada could add 700,000 new energy jobs through clean technology and renewable energy investment but contended they would not realize that gain until 2050.

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