By Canadian Press

Feds release carbon pricing impact data ahead of Conservative motion demanding it

Jun 13, 2024 | 8:53 AM

OTTAWA — Newly released federal modelling data suggest that carbon pricing for consumers and big industry will together lower greenhouse-gas emissions by more than 12 per cent a year by 2030 and shave 0.9 per cent off the national GDP.

The government has been reluctant to share the data because the numbers don’t factor in comparisons including the cost of climate change or the potential for economic growth from climate investments.

The numbers are being published today just as the House of Commons is set to debate a Conservative motion calling for the information to be released.

The existence of the data became known last week when parliamentary budget officer Yves Giroux said Environment Canada provided it so he could update his own analysis.

Giroux was recently forced to admit that his analyses in 2022 and 2023 were flawed because they claimed to examine only the impact of consumer carbon pricing when they also included the costs of the industrial price.

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The Conservatives accused the Liberals of hiding an analysis that would prove the carbon price is economically damaging, but the Liberals say the information is raw data, not analysis.

The numbers come in the form of spreadsheets that model GDP and emissions based on raw economic and climate data.

They show that carbon pricing — both the consumer levy and the industrial system — contributed to lowering emissions by 25 million tonnes last year.

That number is projected set to rise each year until 2030, when the carbon price is set to rise to $170 a tonne and emissions cuts attributed to it will hit 78 million tonnes.

Total emissions would be 12 per cent lower than they would be without carbon pricing, and account for one-third of the total cuts Canada needs to make to meet its 2030 target.

The data also show the country’s GDP is expected to be about $25 billion lower in 2030 due to carbon pricing than it would be otherwise, or 0.9 per cent below what it is expected to be without carbon pricing.

But the figures don’t account for certain factors that could also have an effect on the economy, including the potential benefits that come from Canadians spending carbon rebates or investments businesses make to lower their emissions and avoid paying as much carbon price.

The carbon rebates handed out to families account for 90 per cent of the revenues raised, a detail that is not reflected in the spreadsheets.

This year, the rebates are expected to total $11 billion, sent out in quarterly payments to families in the eight provinces that use the federal system.

Giroux’s analysis concluded that the rebates exceed the cost of the carbon price for about eight in 10 families. It found the approach is progressive in that the lower a family’s income is, the bigger the benefit is.

That’s because the rebates are divided evenly, and are not based on an individual family’s carbon price costs. Lower-income families tend to spend less overall and therefore have smaller carbon price bills.

Wealthier families, which are more likely to drive bigger or more vehicles, take more vacations, live in bigger homes and buy more goods, will have higher carbon price bills as a result.

Giroux and the Liberals have been feuding over his analyses on the impact carbon pricing is having on family incomes.

His reports said while the carbon rebates issued to most families in Canada exceed the direct cost of carbon pricing, those benefits disappear when economic impacts on jobs and wages are factored in.

The Liberals have said both the 2022 and 2023 analyses are misleading because Giroux failed to compare his findings to what would happen to family incomes due to climate change.

A 2022 Canadian Climate Institute report found that by next year, the cost of climate change could slow Canada’s economic growth by as much as $25 billion a year.

This report by The Canadian Press was first published June 12, 2024.

The Canadian Press