In my May 24 column, I shared details from the recent Parliamentary Budget Officer’s report, "A Distributional Analysis of the Clean Fuel Regulations."
The column concluded with the statement: "In 2030, the cost of the Clean Fuel Regulations to households ranges from 0.62 percent of disposable income (or $231) for lower-income households to 0.35 percent of disposable income (or $1,008) for higher-income households."
The carbon tax and clean fuel regulations, by 2030, will increase gas prices by 61 cents per litre.
After the column was published, a local small business owner, who produces value-added goods sold in many local grocery stores, shared some crucial data with my office.
The man’s business purchases bulk food items from Quebec and Atlantic Canada. His most recent shipping bill was $2,889.92. However, what was truly alarming about the shipping bill was that carbon tax and increased fuel surcharges added up to $933.10.
That meant more than 30% of the shipping bill was increased by rising fuel costs caused by policies such as the carbon tax, fuel surcharges and other factors. It also meant this local food producer must raise its prices to consumers to absorb the increased costs.
Remember, when goods leave this small business, they are trucked to local grocery stores where inflated shipping charges from policies like the carbon tax surcharge are added a second time, further driving up prices. That is part of “made-in-Canada” inflation the governor of the Bank of Canada has confirmed in writing to the (House of Commons) finance committee.
While government policies, such as the carbon tax, increase inflation here in Canada, the Bank of Canada announced this week it was raising its benchmark interest rate to 4.75 percent to try and lower inflation. In essence, the Bank of Canada is trying to fight rising inflation caused by government taxes and spending.
That is why former Liberal finance minister John Manley has described the current government’s inflationary spending as “a bit like driving your car with one foot on the gas and the other on the brake…”
If you heard the official Opposition Conservatives threatening to use all Parliamentary procedural tools to delay passage of the (latest) federal budget, that is the reason why.
For some context, the government is proposing $60 billion of inflationary spending, on top of increased carbon taxes and the increased clean fuel standard. All of that will further increase inflation here in Canada.
Conservative Leader Pierre Poilievre has called on the prime minister to present a plan to balance its budget in order to bring down inflation and interest rates. That also includes the government cancelling any future carbon tax increases.
The Conservative caucus is united in that we must make the Bank of Canada's job fighting inflation easier. That, in turn, would allow the bank to cut interest rates sooner at a time when many Canadians cannot afford their current mortgage payments, let alone the latest (rate) increase.
My question this week:
Do you agree that the government must stop fueling “made-in-Canada” inflation that makes the Bank of Canada’s job more difficult?
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.