Carbon tax hike kicks in
At a gas station on Barrington Street on Sunday people had mixed thoughts on the looming carbon tax hike as they filled up their tanks.
“I believe profit taking both inside and outside the oil industry is the cause of inflation,” said Rob Murray, filling up at the Mobil gas station in downtown Halifax.
“If it helps the environment, I don't mind it.”
According to the Nova Scotia Utility and Review Board, Monday's scheduled rise of the tax to $80 per tonne from $65 per tonne will translate into a 3.3 cent per litre bump at the pumps on top of the 14.31 cents the tax had already been adding.
Diesel will go up 4.01 cents, meaning the tax’s per litre cost will rise from 17.38 cents to 21.39 cents.
One pump over, Kaushal Parmar didn’t buy the federal government’s argument that rebate checks paid out quarterly will offset the added cost.
“Getting money from people and then giving it back – you should never have taken it,” said Parmar.
“Everything is out of reach for people with the recession and everything going up. This isn’t helping.”
Faced with opposition to the tax, the federal government dropped it from home heating oil and changed its name in February from the Climate Action Incentive to the Canada Carbon Rebate.
Single Nova Scotians will receive $103 every three months in 2024 while a family of four will get $206.
The federal government has also introduced legislation to raise the rural top-up to 20 per cent in recognition that those people tend to drive more.
The premise is that the increased cost of burning fossil fuels will result in people changing their behaviour to lessen their use.
“When carbon pollution pricing is done right — as we are doing here in Canada — it effectively reduces emissions and makes life more affordable for Canadians by ensuring they receive more back than they pay,” said Finance Minister Chrystia Freeland while announcing the 2024 rebates and rebranding in February.
“That’s why every three months, we are delivering hundreds of dollars back to families through the Canada Carbon Rebate — which gives eight out of 10 families more back than they pay — while ensuring big polluters pay their fair share.”
But the Parliamentary Budget Officer (PBO) doesn’t agree with her math.
Its March 2023 analysis found that when the tax’s downstream impacts were modeled on the economy, only Nova Scotians whose incomes fell in the lowest 20 per cent will see a net benefit while the rest will see an added cost.
While the tax’s structure means that it is revenue neutral, GST is charged on top of the carbon tax. The PBO found that while this will result in direct increased federal revenues of $429 million in 2023-24, it would also add further drag on the economy that will result in decreased employment and investment.
Through decreased personal income tax revenues, the PBO calculated it will add $2.3 billion to the federal deficit in 2024-25, rising along with the tax to $7.1 billion by 2030-31.
“Clearly, despite any claims to the contrary, Monday’s federal carbon tax hike will leave Canadian families financially worse off — now and in the future — damage government finances and negatively impact the economy,” reads a Fraser Institute analysis penned by Julio Mejia and Elimia Eliakbari published last week.
“In light of this reality, many Canadians and elected representatives want the Trudeau government to change course. The government should acknowledge the real impact of the carbon tax on Canadians from coast to coast, and act accordingly.”