Canada’s environment and climate change minister, Steven Guilbeault, admitted that Canadian households will pay more because of carbon taxes, even after rebates.
He made the admission on April 2 in an interview with CTV’s Question Period, stating, “When you look at the details, the better off Canadians, richer Canadians, in the jurisdictions where the federal pricing system is being applied, will pay thousands of dollars more in carbon pricing.”
Meanwhile, average Canadians and low-income Canadians “will get more money,” Guilbeault said.
On April 1, the federal government increased the carbon price by 30 percent on the cost of fuel, from $50 to $65 per tonne. The Canadian Taxpayers Federation (CTF) estimated the jump will raise prices for consumers filling their gas tanks from 11.05 cents to 14.31 cents per litre, and the price of natural gas will go up 12 cents per cubic metre.
The April 1 increase applies to Ontario, Manitoba, Alberta, Yukon, Nunavut, and Saskatchewan. On July 1, the carbon price will increase in Nova Scotia, Newfoundland and Labrador, and Prince Edward Island.
Last year, gas prices topped $2 per litre for the first time in history. The federal government maintains it “does not keep any direct proceeds from pollution pricing,” according to a Nov. 22, 2022, news release.
The news release said provinces that don’t meet federal stringency requirements in 2023–24 get 90 percent of the direct proceeds from the federal fuel charge returned to their residents through Climate Action Incentive payments, while the other 10 percent will be “used to support small business and Indigenous groups.” Those provinces are Alberta, Manitoba, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, and Saskatchewan.
Guilbealt said “the rebates will help the people most in need in Canada.”
Meanwhile, Canada’s Parliamentary Budget Officer Yves Giroux said most households will see a “net loss” even after receiving rebates.
“Based on our analysis, most households will pay more in fuel charges and GST—as well as receiving slightly lower incomes—than they will receive in Climate Action Incentive payments,” he said when announcing the release of his report, “A Distributional Analysis of the Federal Fuel Charge Under the 2030 Emissions Reduction Plan.”
Under the climate plan by Prime Minister Justin Trudeau’s government, the carbon tax rose to $65 per tonne starting April 1 and will gradually go up by $15 every year until 2030, by which time fuel will cost $170 per tonne.
The PBO report estimated that by 2030, the net cost of carbon tax will hit $1,513 on average for households in Nova Scotia, $1,512 in P.E.I., and $1,316 in Newfoundland and Labrador, when fiscal and economic impacts were taken into account.
Households in Alberta will pay on average, $2,773 for carbon tax by 2030–31. In Saskatchewan, families will pay on average $1,723 in net cost, while Manitoba households will pay $1,490, and Ontario will pay $1,820.
While the lowest-income households in these provinces will benefit from several hundred dollars in rebates, the top income quintile can expect to see a net loss of more than $4,000 as cost appears to increase relative to rising income, based on the report’s calculation.
In 2018, when Trudeau announced a carbon tax on Canadians, the federal government promised that the average family would receive more in rebates than the costs from the tax, giving an example of the average family of four in Ontario.
The government said that this example family would receive roughly $300 in rebates in 2019, but only pay $240 in cost increases associated with the carbon tax.
The CTF said in a news release on March 30 that the Parliamentary Budget Officer’s report is clear. “The carbon tax costs families hundreds of dollars more every year than the rebates they get back.” The organization said the report “politicians are using magic math to sell their carbon tax.”
“The Trudeau government claims ‘families are going to be better off’ with its carbon tax and rebates. However, today’s PBO report shows this is incorrect,” said the news release.
Citing the PBO report, the CTF said the carbon tax will cost the average household up to $710 this year even after rebates, with the highest cost to Albertans.
Conservative Leader Pierre Poilievre said on social media on April 2: “So after lying for 5 years that ‘Canadians would be better off’ because of the carbon tax, Liberals now admit most people will pay more than they get back.”
“Let this be a lesson to all the Liberal media mouthpieces that repeated Trudeau’s disinformation on the carbon tax,” said Poilievre.
The Conservatives have said they would remove the carbon tax and lower prices if elected.
Isaac Teo contributed to this report.