Open Letter to MP Scott Aitchison and the Hon. Minister of Natural Resources, Graydon Smith
Subject: Affordability and the Carbon Tax/Rebate
Dear MP Aitchison and Minister Smith,
Both of you have stated that eliminating the carbon tax will increase affordability or reduce the cost burden on Canadians. So, we decided to dig into these statements, and here is what we found.
Eliminating the carbon tax will also eliminate the carbon rebate.Currently Canadian households receive a tax rebate of anywhere from $760 to $1,800 per year, depending on which province they live in A couple in rural Ontario receives $1,008/year, which includes a 20% rural supplement, and a family of 4 receives $1344.
1) Regarding the cost-of-living impact of a carbon tax
“The Bank of Canada has estimated that the carbon tax increases inflation by 0.15 per cent. Trevor Tombe, an economist at the University of Calgary who has studied the impact of the carbon price on consumer costs, points to Statistics Canada data that suggests its impact on food prices is less than one per cent.” CBC News · Posted: Oct 07, 2023 https://www.cbc.ca/news/politics/carbon-tax-food-prices-wherry-analysis-1.6989547
So, a $300 grocery bill is now up less than $3 due to the carbon tax – the cost of a candy bar.
And what about that $0.176 a liter on gas, what is that costing the average Canadian? Well, at 20,000 km per year, a vehicle that burns 15 liters/100 km will pay $528 carbon tax a year or just over half what Ontarians receive in the rebate. The remaining dollars will cover any other expenses related to the carbon tax.
So NO, the elimination of the carbon tax will not increase affordability, but will in fact decrease affordability for a majority of Canadians.
2) The carbon tax may be a burden on those who burn a LOT of carbon/fossil fuels, by idling, by purchasing larger vehicles, by driving at higher speeds, or enjoying life in their boat or RV. i.e. a cost burden for those who can afford it.
It is not a burden on those who, due to financial limitations, can’t afford to burn fossil fuels or on those who choose to burn fewer fossil fuels through their life choices.
In a way, the carbon tax/rebate system is a way of redistributing wealth, from those who can afford to burn, to those who cannot afford to burn.
3) Does a carbon tax help fight climate breakdown?
Carbon pricing is about recognizing the cost of pollution and accounting for those costs in our daily decisions by choosing less carbon-intensive options. Anything that costs more, makes us think about ways to reduce those costs.
So, if fuel costs are higher, people are more likely to consolidate their trips into town, to purchase a smaller or more efficient gas vehicle, or to buy an electric vehicle and completely eliminate the gas tax on transportation. Any of these options reduce the carbon entering the atmosphere and heating the planet.
The government of Canada estimates that carbon pollution pricing will contribute as much as one-third of Canada’s emissions reductions in 2030. So definitely, the carbon tax/rebate system reduces carbon emissions and therefore helps reduce climate breakdown.
In short, if you are successful in eliminating the carbon tax, the truth is you will make life less affordable for the majority of Canadians.
Hopefully Canadians and Ontarians will remember this at the polls in the coming elections.
Sincerely,
Paul Kuebler, Port Sydney
Sue McKenzie, Gravenhurst
Len Ring, Gravenhurst
Linda Mathers, Port Carling
Lesley Hastie, Huntsville
On behalf of Climate Action Muskoka