Just how much will Ottawa collect in carbon tax revenue?
The Canadian government will collect billions of dollars in direct revenue from its federal carbon pricing system over the next four years, but most of the country’s households will still receive more in rebates than they initially pay, Canada’s budgetary watchdog said.
The revenue neutral carbon pricing system introduced in October, 2018 includes a “backstop” that applies to five Canadian provinces whose own provincial climate plans the Trudeau government said did not meet federal standards, including Ontario and energy-rich Alberta.
Under the program, the majority of the proceeds from the fuel charge are returned directly to individuals and families through rebates, according to Reuters.
The Parliamentary Budget Officer said Ottawa could expect to collect $2.81 billion in direct revenues in 2019-20 from its current $20 per tonne price on carbon.
Direct revenues, it noted, would rise to $8.27 billion in 2022-23, with the carbon price increasing to $50 per tonne.
An additional $99 million will be collected this fiscal year through Canada’s federal sales tax, the PBO told Reuters, adding that figure is expected to triple by 2022-23.
Households, the PBO said, can still expect to receive 90 per cent of the revenues raised from the fuel charge proceeds and about 80 per cent of total revenue collected via direct federal rebates.
“Under the federal government’s current rebate structure, most households will still receive more than what they pay in fuel charges,” said Parliamentary Budget Officer Yves Giroux.
The opposition Conservatives vehemently oppose the Trudeau government’s carbon tax, insisting the policy hurts Canadian families and businesses and should be repealed.