Ever since Justin Trudeau introduced his carbon tax in 2019, the Prime Minister and his environment ministers have been dining out on their claim 80% of families will be better off financially because of carbon tax rebates.
But in Ontario, that’s simply not true.
According to independent, non-partisan Parliamentary Budget Officer Yves Giroux, 40% of Ontario households are already paying more in carbon taxes annually than they receive in rebates — double the national average — with costs escalating every year.
Giroux reported last year that while Trudeau’s carbon tax still leaves most Canadian households better off financially because of the rebate system, “once the provincial and federal sales taxes on carbon pricing are accounted for, these amounts will be lower on a net basis when compared with the analysis in our (2019) report.”
As a result, 40% of Ontario households, based on income, are already paying more in carbon taxes then they get back in rebates, the difference ranging, according to the PBO, from a low of $80 this year to a maximum of $208 in 2024-25.
But those estimates don’t include Trudeau’s recently announced hike of the federal carbon tax by 225% — from $40 per tonne of emissions this year to $170 per tonne in 2030.
That’s the result of a broken election promise by the PM in 2019, when then federal environment minister Catherine McKenna said Trudeau’s carbon tax would be frozen at $50 per tonne annually as of 2022.
Nor does the PBO’s calculations include the impact of the Trudeau government’s second carbon tax — the Clean Fuel Standard — coming into effect in 2022, which doesn’t have rebates.
The Trudeau government estimates the CFS will increase energy costs to Canadian families, in addition to the carbon tax, by up to $208 annually in 2030, with a low estimate of $69 and a mid-range estimate of $136, depending on where people live and how they heat their homes.
It also said in a report released just before Christmas on the CFS regulations — intended to reduce the carbon intensity of liquid fossil fuels such as gasoline, diesel and fuel oil — that it will increase energy poverty in Canada, disproportionately hitting low and middle-income families, those living in single, detached homes, seniors, single mothers, rural residents and other groups.
As the report described it:
“It is expected that increases in transportation fuel and home heating expenses would disproportionately impact lower and middle-income households, those living in single detached households or those without control over the energy efficiency of their dwellings that use heating oil, as well as households currently experiencing energy poverty or those likely to experience energy poverty in the future … single mothers may be more vulnerable to energy poverty and adverse impacts from increases to transportation and home heating prices” along with “other socio-economic groups that … may not be fully captured in this analysis due to lack of data.”
Trudeau’s carbon tax and rebates only apply in four provinces — Ontario, Alberta, Saskatchewan and Manitoba.
The other provinces and territories have carbon pricing regimes the Trudeau government has accepted as consistent with the federal goal to reduce greenhouse gas emissions linked to human-induced climate change by 32% below 2005 levels by 2030.
Finally, a hat tip to Patrick Brethour, writing in the Globe and Mail Friday, who twigged me to the fact 40% of Ontario residents are paying more in carbon taxes than they get in rebates.