Trudeau’s three carbon taxes take a hammer to Canadians’ wallets
When all you have is a hammer, everything looks like a nail.
Prime Minister Justin Trudeau’s hammer is higher taxes.
People are using too much natural gas? Hit ’em with a carbon tax.
People like their pick-up trucks and minivans? Throw another tax at ‘em.
People still want Canada’s oil and gas? Swing the tax hammer again.
With Trudeau’s announcement of a cap on the oil and gas sector, Ottawa is now flirting with its third carbon tax.
Trudeau first imposed a consumer carbon tax in 2019. It now increases the price of gasoline by 14 cents per litre, natural gas by 12 cents per cubic metre and diesel by 17 cents per litre. That carbon tax costs the average family up to $710 this year even after the rebates, according to the Parliamentary Budget Officer.
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Trudeau buried a second carbon tax in fuel regulations that kicked in on Canada Day. The regulations require producers to reduce the carbon content of their fuels. If companies can’t meet the requirements, they’ll be forced to pay the tax.
The federal government hasn’t released an analysis of the current cost of its second carbon tax. But due to the centrally-regulated fuel prices in Atlantic Canada, those provinces announced the second carbon tax would initially cost their drivers between four and eight cents per litre at the pumps.
By 2030, when the fuel regulations are fully implemented, the second carbon tax will add up to 17 cents per litre to the price of gasoline and cost the average family up to $1,157, according to the PBO.
On Dec. 7, Trudeau brought in his third carbon tax through a cap on Canada’s oil and gas industry. The government will cap the industry’s emissions and then force companies to purchase emissions credits to keep producing.
This is known as a cap-and-trade system and it’s a form of carbon tax. The government sets up an artificial market and mandates a certain level of emissions that declines over time. The government-mandated emissions cap determines the carbon tax a company must pay to buy credits.
As the Carbon Tax Center notes, “Politically, cap-and-trade has functioned as a ‘safe harbour’ for politicians who grasp the need to price carbon emissions but cling to the need to ‘hide the price’ to appease interest groups and/or voters.”
We’re already seeing opaqueness from Environment Minister Steven Guilbeault who assures Canadians “the cost of putting in place the regulation” will “come down the road.”
Even economists who support a carbon tax call Ottawa’s oil and gas cap “a step backwards for climate policy.”
For economists who argue in favour of a carbon tax, there’s a crucial kicker:
“First and foremost, carbon pricing only works in the absence of any other emission regulations,” economist Ross McKitrick said. “If pricing is layered on top of an emission-regulating regime … it will not only fail to produce the desired effects in terms of emission rationing, it will have distortionary effects that cause disproportionate damage in the economy.
“Carbon taxes are meant to replace all other climate-related regulation.”
Trudeau’s three carbon taxes have been added to a mountain of other fuel taxes and regulations.
Canadians pay federal and provincial sales taxes, federal and provincial excise taxes and even municipal taxes at the gas pumps. Then you pay a couple of federal carbon taxes on top.
The feds seem eager to give corporate welfare to every company that utters the word “green,” politicians “employ every tool available” to chase away natural resource development, and the Trudeau government muses about regulating farmers’ fertilizer use and even emissions from cow burps.
Far from replacing other regulations and subsidies, Trudeau’s three carbon taxes layer additional costs on Canadians who can barely afford to make ends meet.
Franco Terrazzano is the Federal Director of the Canadian Taxpayers Federation.
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