Revenues expected to fall after 5 years as Canadians burn less fossil fuel to avoid costs
Canada’s budget watchdog agrees with the federal government’s claim that Canadians are going to get more from the climate change tax rebate than they are paying in carbon tax.
The federal government implemented a fuel surcharge this month of $20 per tonne of emissions in the four provinces that have not enacted carbon-pricing systems of their own.
The new analysis by the parliamentary budget office predicts that, this year, the fuel charge will bring in more than $2.4 billion. Another $200 million will be raised from the tax applied to emissions from large industrial emitters, who pay it on a portion of their emissions above a level set by the government.
In 2022-23, when the price hits $50 a tonne, the revenues will climb to $5.8 billion from the fuel charge and $448 million from large emitters. The four provinces involved are Saskatchewan, Manitoba, Ontario and New Brunswick.
The ‘grand bargain’ Canadians were promised was carbon pricing in exchange for building pipelines. We were supposed to have both. Will we end up with neither?
Between Liberals trying to be clever and Conservatives playing at being dumb, Canada’s attempt to manage the energy/climate change file is shaping up as a colossal bipartisan failure.
The “grand bargain” Canadians were promised — the one they tell pollsters they support — was carbon pricing in exchange for building pipelines (or, if you prefer, of pipelines in exchange for carbon pricing). Through the combined efforts of the two parties, both sides of the exchange now look in doubt.
Not only are we nowhere near to meeting our international commitments for reductions in carbon emissions, such progress as we have made has come at vastly excessive cost. Regulatory edicts banning coal-fired electricity generation, for example, carry an estimated implicit price of as much as $130 per tonne of emissions reduced, about three times the estimated social cost of carbon and six times as much as the carbon tax the federal government has at last begun collecting.