The federal Liberal government will begin levying its carbon tax on
greenhouse gas-emitting fuels today in the four provinces that have
refused to take part in the pan-Canadian climate framework.
The tax or levy is designed to lower the country's carbon emissions so
Canada can meet the reduction targets it agreed to at the Paris climate
summit.
In Ontario, Manitoba, New Brunswick and Saskatchewan, where
conservative-minded governments have steadfastly opposed any sort of
carbon pricing scheme, Ottawa will apply its carbon tax on fossil fuels —
which starts this year at $20 per tonne of GHG emissions. In the
provinces that already have other carbon pricing measures, such as
Alberta, B.C. and Quebec, nothing changes, since they have models Ottawa
has deemed acceptable.
The four provincial governments opposed to Prime Minister Justin Trudeau's plan — along with the federal Conservative party — fear it will be economically damaging and far too punitive for consumers and small businesses.
Supporters of the Liberal plan say the threat of climate change demands
action and a revenue-neutral plan of this sort is the best way to shift
patterns of consumption away from GHG-emitting fossil fuels.
How much is this whole thing going to cost me?
Based on federal figures, the tax in the four non-compliant provinces
will result in an approximate cost increase of 4.42 cents a litre for
gasoline, 5.37 cents for light fuel oil (home heating fuel), 3.91 cents
per cubic metre for natural gas and 3.10 cents per litre for propane.
Based on those figures, and according to calculations by CBC News, the
average Ontario household will pay roughly $10 more a month for natural
gas (based on average of 252 m3 of consumption) as of April 1.
The figure will be considerably lower in the summer but possibly much
higher in the winter, when natural gas consumption for home heating
spikes. The average Ontario household, for example, consumes about 419
m3 of natural gas in January but only 51 m3 in July, according to data
supplied to CBC News by the Ontario Energy Board regulator.
The cost to fill an empty residential oil tank, which are common in
places like rural New Brunswick and vary greatly in size, will increase
by about $48 for a 910-litre model.
The cost to fully refuel a Honda Civic (based on a 47-litre tank) will
increase by about $2, while a full fill-up for a Ford Explorer SUV will
cost about $3 more.
Those costs are expected to rise each year as the carbon tax increases by $10/tonne until it hits $50 in 2022 — meaning those costs will more than double in less than three years' time.
Consumers will not pay the tax directly to the federal government;
rather, Ottawa will impose the tax on fuel and production and
distribution companies, which will in turn pass on those costs to
customers.
A carbon price will be levied in the three northern territories starting July 1, 2019.
How much will I get as a carbon rebate?
To compensate for the cost of living increase, the federal government
has vowed to return every single dollar it collects in carbon tax to the
people in the province in which it was collected — an attempt to make
household budgets whole on the money they'll shell out as part of this
carbon reduction scheme.
In fact, some Canadians are already set to receive the 'Climate Action
Incentive payment', or rebate. It's paid to eligible taxpayers who claim
it on their 2018 tax return with the Canada Revenue Agency.
Ottawa has said future payments will be made annually and will reflect about a year's worth of emissions.
Here's what the average household (defined by Ottawa as 2.6 people) will receive from the federal government:
- In Ontario: about $300 a year.
- In New Brunswick: $248.
- In Manitoba: $336.
- In Saskatchewan: $598.
If a taxpayer is entitled to a tax refund, that refund would be boosted
by the amount each household is entitled to under the new climate
incentive payment program. If you owe the federal government money at
tax time, that amount would be reduced by the amount you stand to gain
from this initiative. There is only one rebate or tax reduction per
household.
The amount will vary based on the province and the number of people in a
household. The payment is not a means-tested benefit and does not
depend on income levels.
For example, a single adult in Ontario would see about $154 next year from the payment.
Is the carbon tax revenue-neutral?
While the federal government has insisted the carbon tax will be
revenue-neutral for the federal government, a government official
speaking at a technical briefing for journalists acknowledged that some
Canadians — about 30 per cent of them — will pay more per year in carbon
taxes than they stand to gain from the new rebate program.
The official said these people are more likely to be wealthier Canadians who have to heat bigger homes or own larger vehicles.
The government says the other 70 per cent of Canadians will receive more
in climate rebate payments than they'll pay each year through the new
carbon tax.