Flipping Canada’s carbon price debate

Categories: News
Published on: September 24, 2018

National Post / John Ivison / 19 September 2018

The Liberals’ Greenhouse Gas Pollution Pricing Act requires Ottawa to return tax revenue to the province where it was raised in cases where it has imposed a “backstop” carbon tax in the absence of a recognized provincial climate plan. Trudeau has indicated that, rather than sending a rebate to the governments of those provinces, he may choose to send the money directly to its households.

Research by environmental economist Dave Sawyer of EnviroEconomics suggests that in this scenario most households, regardless of income level, would receive more money from the federal government than they would pay in carbon taxes.

The Conservatives have long railed against the Liberals’ “tax on everything” but the study of three provinces suggests those households — particularly at the lower end of the income spectrum — would end up better off. The amount they receive would rise over time in line with the direct carbon tax, which will start at $20-per-tonne next January and rise to $50-a-tonne in 2022.

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