What are the indirect costs of the Trudeau government carbon tax?

Families should plan now for their carbon tax — er, “pollution tax” rebate.  You might soon be told you’ll need sweaters as part of a climate action plan.

[Photo: Dan Gold]

Trying to determine exactly what the federal Liberal government is doing with their plan to tax “pollution” via a carbon tax is an exercise in total frustration. The recent announcement from Prime Minister Justin Trudeau promised taxpayers in the four* provinces that said they will not impose a carbon tax, was that he will be hitting them with “a price on pollution that causes climate change from coast to coast to coast”!

He went on to say he would help Canadians adjust to the tax by handing out rebates to 80% of the families in those four provinces and claimed “eight in ten families will get back more than they pay directly”!

What they will pay indirectly is unknown.

Curiosity piqued, I decided to calculate how much that might be.

Emissions by the four provinces total (Source: StatsCan 2016) 273.1 megatonnes so, at $20 per tonne, the “pollution” tax should** generate $5,462 billion (rounded to $5.4 billion).

StatsCan (2015) says there are 6,513,000 households in the four provinces. Trudeau said rebates in the first year to each household would be as follows: Ontario $307, New Brunswick $248, Manitoba $336 and Saskatchewan $598. The total rebates will therefore be around $1.6 billion meaning about $3.4/3.8 billion will be “indirect” *** taxes increasing the cost of other consumption by $522 per household.

So, the “rebate” will represent about 30% of the total “pollution” tax the federal government will levy under the “National Carbon Plan” or NCP. The Prime Minister claims all the funds collected under the NCP will be disbursed to other recipients such as schools, universities, municipalities, hospitals, etc. etc.

Now, forgive me if I engage in wild speculation about the future when Canadian households start to experience the NCPP (National Carbon Poverty Plan). It might be like Ontario households when they experienced the cost of electricity surging over 100% in just 10 years. I suspect we will experience rhetoric similar to that from Ontario’s various energy ministers such as Bob Chiarelli and his “It’s less than a cup of Tim Hortons’ coffee a year,” response to the $1.1 billion cost of the gas plant scandal. Beyond that Energy Minister Chiarelli also linked in to the WWF (World Wildlife Fund)**** when he and other Ontario Liberal Ministers in early 2014 joined WWF to celebrate “National Sweater Day”! The message conveyed was that Ontarians could fight climate change by “Putting on a sweater and turning down the thermostat. If every Canadian turned down their thermostat in the winter we could save 2.2 megatonnes of carbon dioxide per year”.

Two years later, after Dianne Saxe was appointed Ontario’s Environmental Commissioner by the Wynne government, she issued her first report to the Ontario Legislature. In it is this statement: “the energy required to heat an existing home can be reduced many different ways (see Figure 1.1), including by:  reducing the target temperature and putting on a sweater”.

What we are liable to see in a few years, should the Justin Trudeau Liberals win a second term is a lot more about sweaters. (It’s already out there: simply Google “Justin Trudeau+sweaters”! The search will get 126,000 hits.)

Maybe Canadian households receiving the rebate in 2019 should resolve now to use the money to immediately purchase one of the many “Trudeau” variety of sweaters available in the marketplace.

PARKER GALLANT

*Manitoba, New Brunswick, Ontario and Saskatchewan.

**Larger companies will be taxed at a lower rate of 80/90% escalating to 100% over time.

***Direct taxes apply to tax on fuel for home heating and for transportation.

****Gerald Butts, senior political advisor to the PM was the CEO of WWF from 2008 to 2012