Canadian Prime Minister Justin Trudeau delivered his nation’s greatest April Fool’s Joke six years ago. Ottawa implemented a federal carbon tax on April 1, 2019, as part of a nationwide effort to reduce greenhouse gas emissions by slapping a price on carbon pollution. Now, data has confirmed the program neither reduced the nation’s emissions nor helped the Canadian people. Will the rest of the world learn from Canada and put the kibosh on this climate policy?
The carbon tax rate was launched at $20 per ton of carbon dioxide and increased by $10 per ton yearly. In 2024, the federal minimum price climbed to $80 per ton. The levy applied to all fossil fuels, including coal, diesel, gasoline, and natural gas.
The governing Liberals promoted the idea by claiming that revenues would be returned to individuals and businesses through tax rebates and other programs to offset the increased costs. That said, Trudeau tried to say it was more about supporting the environment, recently declaring in an interview that fighting climate change was more important than feeding your kids.
Yes, he uttered these words at the Global Citizen Now Event at the G20 Leaders’ Summit in Rio de Janeiro, Brazil, in November:
“It’s really, really easy when you’re in a short-term survive, I gotta be able to pay the rent this month, I’ve gotta be able to buy groceries for my kids, to say, OK, let’s put climate change as a slightly lower priority.
“There’s a sense that affordability is in direct contrast with our moral responsibility to protect the planet. And that is something that, unfortunately, people have been amplified and used propaganda, misinformation, disinformation, and flat out lies to scare people into saying, oh, no, no, no. We’ve gotta take care of our household budget and bottom line first and environment second.”
After the multi-year experiment, did Canada follow through on the penalty’s aims? Considering that the Liberal Party candidates attempting to replace Trudeau, from former Bank of Canada Governor Mark Carney to former Finance Minister Chrystia Freeland, are pledging to abolish the boondoggle, it is safe to say that it failed.
Years ago, the Canadian government pledged to slash greenhouse gas emissions as much as 45% below 2005 levels by 2030. Despite the carbon tax (the policy meant to cure the nation’s climate guilt), the Great White North has reported that emissions have declined by just 7% below 2005 levels, roughly aligning with former Prime Minister Stephen Harper’s goals. As a result, according to federal Environment Commissioner Jerry DeMarco, Canada will miss its climate targets.
While DeMarco’s statement was telling, the better admission came from the Parliamentary Budget Office (PBO) in December 2023. The PBO declared that even if Canada achieved its emissions objectives, it would “not [be] large enough to materially impact climate change.” Ouch.
A couple of provinces, namely British Columbia, have installed their versions of carbon pricing. The results have not been pretty. Since the western province introduced the carbon tax in 2008, emissions have increased every year. Oil and gas production emissions have surged 25%. Proponents will argue, however, that without the carbon tax, the levels would be as much as 15% higher. So, households and businesses are paying for mediocrity. That’s gold, Jerry. Gold!
The bureaucracy of implementation and management has been immense. The Canadian Taxpayers Federation (CTF) reported that the price tag for administering the policy has cost taxpayers close to $300 million since 2019. “Not only does the carbon tax make our gas, heating and groceries more expensive, but taxpayers are also hit with a big bill to fund Prime Minister Justin Trudeau’s battalion of carbon tax bureaucrats,” said Franco Terrazzano, CTF Federal Director, in a statement.
But climate-conscious Canadians should not worry. They can follow Freeland’s lead. In 2023, she told Canadians that they could walk or take the subway to help the environment and offset the costs of the carbon tax (more on that later). While this is feasible in major urban centers like Toronto or Vancouver, it is impossible if you reside in Brandon, Manitoba, or Regina, Saskatchewan.
The Canadian people have not been fooled. A December 2023 Nanos Research poll found that nearly half the country thinks the carbon tax is ineffective at combating climate change. Even with these numbers, Trudeau had insisted his government would never eliminate the financial torture device.
So, Canada has failed to save the environment. Surely, residents are financially better off, right?
Last summer, the federal government projected that the carbon tax would cost the Canadian economy approximately $25 billion in 2030. The estimates make sense, considering how much it has raised living costs over the last few years.
The levy adds 17 cents per liter of gasoline, 21 cents to a liter of diesel, and 15 cents per cubic meter of natural gas. According to the Institute for Energy Research, residential utility bills across the country have risen an extra $50 per month. While the numbers vary by province, residents of Ontario, the nation’s most populous province, have seen their home heating bills climb by an extra $381 this freezing winter.
The outgoing prime minister repeatedly asserted that Canadians would be better off in an economy with a carbon tax because they would receive tax-free direct payments, known as the Canada Carbon Rebate (previously called the Climate Action Incentive Payment). According to the Trudeau government, the premise is that if your living costs go up by $500, then you will receive a higher rebate. This has not been the case.
The most recent PBO report for the fiscal year 2024-2025 concluded that the carbon tax would cost the average Canadian household between $377 and $911, even after receiving their checks. Sixty percent of households will pay more in carbon taxes than what they get from the rebates. Within five years, the average net cost of the carbon tax for households would range from $1,490 in Manitoba to $2,773 in Alberta. The government’s finances will also worsen, with the federal budget deficit rising by $2.3 billion because of the adverse economic effects.
Looking ahead, if neither the Conservatives nor the Liberals ax the tax (the New Democrats would almost certainly leave it alone), the Fraser Institute estimates that it will shrink the economy by 1.8%, eliminate nearly 185,000 jobs, and reduce real (inflation-adjusted) incomes in the coming years. And this is without President Donald Trump’s tariffs being factored into the equation!
Canada should be a case study for what the carbon tax will and will not do. Before the latest wave of admissions that the public policy was horrific, the CTF revealed in access-to-information records that the Trudeau government spent nearly $2 million urging other countries to impose carbon taxes. Will these revelations be enough to deter advanced and developing nations from emulating Trudeaumania? According to the World Bank, 70% of countries do not have a national carbon tax. Considering the results, the real question is: Why have other countries adopted the concept?