(Ottawa) Newly released federal modeling data suggests that carbon pricing on consumers and large industries will reduce greenhouse gas emissions by more than 12% per year by 2030 and will also reduce greenhouse gas emissions by 0.9 % national GDP.
The Liberal government has been reluctant to share this data because the figures do not take into account comparisons, in particular the costs of climate change on the economy or the growth potential of investments in the energy transition.
The figures were released Thursday just as the House of Commons was preparing to debate a Conservative motion calling for the disclosure of this information.
The existence of this data was revealed last week when Parliamentary Budget Officer Yves Giroux said Environment Canada had provided it to his office so it could update its own analyses.
Because Mr. Giroux was recently forced to admit that his 2022 and 2023 analyzes on the subject were flawed, because they claimed to examine only the impact of carbon pricing for consumers, when they also included the costs for the industry.
The Conservatives have accused the Liberal government of hiding analysis that would prove that carbon pricing harms the Canadian economy, but the Liberals say it is raw data, not analysis.
The figures come in the form of spreadsheets that model GDP and greenhouse gas emissions based on raw economic and climate data.
This data shows that carbon pricing – both the consumption tax and the industrial system – helped reduce emissions in Canada by 25 million tonnes last year. This figure is expected to increase each year until 2030, when the rate is expected to reach $170 per tonne – the emissions reductions attributed there would then reach 78 million tonnes.
The raw data also shows that due to carbon pricing, the country’s GDP is expected to be around 25 billion lower in 2030 than it would otherwise be, or 0.9% lower than it would be should be without carbon pricing.
But these figures do not take into account certain factors that could also have an effect on the economy, notably the consumer spending of Canadians with their federal rebate checks, or the investments that businesses make to reduce their emissions in order to reduce their ecotaxation.
“Carbon rebates” to families account for 90 percent of revenue generated by federal pricing, a detail not reflected in the spreadsheets.
This year, federal rebates are expected to total $11 billion, delivered in quarterly payments to families in the eight provinces that use the federal system. Quebec and British Columbia have their own system and are not subject to federal pricing.
Mr. Giroux’s analysis concludes that for about eight in 10 families, quarterly federal rebates exceed the costs of carbon pricing. He also noted that this approach is progressive in that the lower a family’s income, the more useful this benefit is.
Indeed, the Canadian Carbon Rebate is not based on a family’s energy bills. However, low-income families tend to spend less overall and therefore have lower carbon bills.
Mr. Giroux and the Liberals do not agree on the real impact of carbon pricing on household income. Reports from the Parliamentary Budget Officer indicate that while rebates to most families in Canada exceed the direct costs of carbon pricing, those benefits disappear when the economic impacts on jobs and wages are taken into account.
The Liberals argue that the 2022 and 2023 analyzes were misleading because Mr. Giroux did not compare his conclusions to the impacts of climate change on household income.
A 2022 report from the Climate Institute of Canada reveals that by next year, the cost of climate change could shave up to $25 billion a year from Canada’s economic growth.