This year, the federal government will collect nearly $12 Billion in revenue through the Carbon tax. According to the Canadian Trucking Alliance (CTA), our country’s largest association of truckers and owner-operators, about $ 2 Billion of that amount will come from long-haul truckers. Canada’s carbon levy began in 2019 at $ 20 per tonne and increased by $ 10 per year to $ 50 per tonne in 2022. The Liberal flagship climate policy is scheduled to rise to $ 95 per tonne on April 1st, 2025. It will go up by $ 15 per tonne until it reaches $ 170 per tonne in 2030.
By 2030, truckers and trucking companies will be paying $4 Billion or more, each year. The federal government has repeatedly claimed the carbon tax wouldn’t cost Canadians financially and doesn’t contribute to inflation. That’s a bold assertion, given all that gets delivered and 98% of vehicles that use fossil fuels pay the carbon tax. Now Canadian government sources report that even with rebates, the overall income loss is ~ $1,540 per employed Canadian, per year. And revised government estimates imply the purportedly revenue-neutral carbon tax is responsible for about one-quarter of the inflation Canadians are feeling.
We’re increasingly skeptical about the effectiveness of the carbon tax in curbing global climate change. The government’s own data confirms cost to the economy will soar into the billions. A Fraser Institute study found that a $170 per tonne carbon pricing will cause GDP to shrink by 1.8% and generate permanent job losses of ~ 185,000 positions.
Biggest Polluters Pay the Least
The number one reason to end the carbon tax…it’s hypocritical policy. Every year, federal and provincial government’s use taxpayer dollars to provide financial incentives and tax breaks to oil and gas companies. These subsidies cost Canadians ~ $6 Billion or roughly $ 214 per taxpayer, annually. And unlike the federal carbon tax, we don’t receive rebates on this allocation.
Suncor Energy, one of the largest oil companies in Canada paid just $ 1.67 per tonne of GHG before 2020 when Canadian families were paying $30 per tonne. Suncor says it will pay ~ $9/tonne in 2025, less than a one tenth of the ~ $100 per tonne of general carbon pricing during this period. It’s the equivalent to raising taxes on cigarettes to discourage smoking while also giving tobacco companies tax breaks to produce more cigarettes and generate higher profits.
When fossil fuels are made artificially cheap to produce, investing in renewal energy is less viable. It creates false dependency on oil and gas, which means we pay more carbon tax in the long run because there are fewer alternatives. In a scorecard ranking G20 countries’ fossil fuel subsidies, Canada ranked last among 11 OECD countries on making progress to end support to the fossil fuel industry. Canadians spend more supporting oil and gas extraction than Australia, Germany, Japan, Mexico and the United States.
Canada’s Influence on Climate Change
Worldwide carbon emissions have been calculated at 36 trillion tonnes annually. Canada’s CO2 emissions have been stable at ~ 1.7% of global output and are expected to drop with a “rapid increase in emissions from economically developing and emerging countries, particularly China (+ 71.&% from 2005 to 2019), India (+71.3%), Brazil (+16.2%) and Indonesia (+37.9%)”, according to government of Canada reports. China alone accounts for 35% of global CO2 emissions.
Canada has approximately 990 million acres of forests, 370 million acres of wetlands and 167 million acres of crop-yielding farmland. Environmentalists state that trees absorb approximately 2.6 tonnes of carbon per acre, per year. After Brazil and Russia, Canada is the third largest country of trees. In forests alone, our country absorbs almost four times the carbon as we emit. Meaning the other three quarters of our forests are being sustained on the carbon being emitted by the rest of the world.
The world’s economy is powered by fossil fuels, which provides over four-fifths of the planet’s energy demand, with oil as the largest component. Saudia Arabia intends to begin flooding the market with oil. They’re abandoning the unofficial price target of $100/barrel with plans to increase crude output. Crude oil prices are down 26% from their 52-week peak of $98/barrel. Global oil benchmark Brent crude futures settled at their lowest level since December 2021, after OPEC+ revised its demand forecast for 2025.
Hurting Global Competitiveness
Outside of rebates paid to small businesses, the current system fails to address the competitiveness problem faced by lower-emitting companies. As the carbon tax increases to $ 170 per tonne in 2030, businesses will find that they face an intensifying disadvantage in international markets. According to the World Bank, over three quarters of countries don’t have a national carbon tax, including all top emitting countries.
Last year, the OECD downgraded Canada’s economic growth prospects to 2060, as dead last out of 38 nations. Canada’s economy has fallen behind population growth for the fifth straight quarter with real GDP per capita declining by 0.1% in Q2 2024, according to data from Stats Can. Compared to the same period in 2022, per capita GDP is down 3.6%. As an RBC analyst noted, “this is recession-like performance”.
Liberals’ own internal calculations (that they tried to keep secret) show that by 2030 the carbon tax will cost $25 Billion a year in lost economic activity (the actual figure will be higher). Real GDP per capita in the U.S. was 43% higher than Canada in 2023. In 2024, the gap will widen to nearly 50%. It means, the U.S. is on track to produce nearly 50% more per person than Canada will.
The Canadian loonie is down just over 4% against its U.S. counterpart since November 5th. It slumped nearly 0.5% after Trump announced that on Day One of his presidency, he would impose a 25% tariff on all goods entering the U.S. from Canada and Mexico. It’s time to end the carbon tax. A decision that will be popular with consumers who can drive and heat their homes for less and businesses who can’t bear an additional tax burden.