With the House of Commons back in session, Opposition Day is back.
Opposition days, also known as “supply days” are where the opposition parties can table motions for debate in the House.
For the Conservative Opposition, the motion we tabled this week read as follows:
“That, in the opinion of the House, given that the government's tax increases on gas, home heating and, indirectly, groceries, will fuel inflation, and that the Parliamentary Budget Officer reported the carbon tax costs 60% of households more than they get back, the government must eliminate its plan to triple the carbon tax.”
Triple the carbon tax?
I have found that many Canadians are unaware that the government plans to raise the carbon tax from the current level of $50 per tonne to $170 per tonne by 2030, with increases each and every year.
That breaks the promise the government made in 2019 when it stated the plan was not to increase the price (carbon tax) after 2022.
The new rate will also apply to carbon taxes created under provincial law, such as the one in British Columbia.
Should a provincial government refuse to increase its carbon tax in step with the federal government, the Supreme Court of Canada has confirmed the federal government can impose its own carbon tax as a backstop.
Why does the Official Opposition believe this is a problem?
As we have watched 40-year high inflation take hold in Canada, one of the key drivers of inflation is the high price of gasoline. Higher gas prices not only harm household budgets, they also increase transportation costs and in turn raise prices on groceries and other consumer goods—all increasing inflation.
Earlier this year the Bank of Canada was asked to calculate the cost of the carbon tax, at current levels, and how that affects inflation here in Canada. The answer from the Bank of Canada was alarming.
“If the charge (carbon tax) were to be removed from the three main fuel components of the consumer price index (gasoline, natural gas and fuel oil) it would reduce the inflation rate by 0.4 percentage points. In other words, if that policy had come into effect at the start of the year, January’s inflation rate would have been 4.7% instead of 5.1%.”
Defenders of the carbon tax will often reference that there are rebates. Unfortunately, rebates do not fairly reflect the differences in services available here in Canada.
For someone in Toronto who does not own a car, he or she will likely come out ahead under any carbon tax. However, for someone living in a rural community, like Hedley B.C., where there is no high school, no middle school, no hospital, no major grocery stores and very limited transportation options, he or she is forced to drive to larger communities, such as Princeton and Keremeos and are much more severely impacted by the carbon tax as a result.
There is also a larger problem that our major trading partners, the United States and Mexico, do not have a carbon tax, which means producers located in those countries can undercut Canadian producers and at the same time there is no actual emission being reduced.
Finally, we must also recognize not every factor that drives inflation is within the control of the Canadian government.
International supply chain factors and (Russian President Vladimir) Putin’s war against Ukraine are all outside of the control of the Bank of Canada, when the bank raises interest rates.
That leaves the question, what can the Government of Canada do to help increase affordability and reduce inflation?
As the Bank of Canada has confirmed, the carbon tax is inflationary, the Opposition is calling on the government to stop its planned tripling of the carbon tax.
So, question this week is:
Do you agree?
I can be reached at [email protected] or call toll free 1-800-665-8711.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.