Poilievre, Guilbeault claim victory after federal budget watchdog's updated carbon tax report

Both the Liberals and Conservatives are claiming a win after the parliamentary budget officer (PBO) released an updated report on the economic impacts of the federal carbon tax on Canadian households.

The new report, published Thursday, came to similar conclusions as past analysis, despite an error in findings released in 2022 and 2023, which inadvertently included the industrial carbon pricing system.

The average household where the federal carbon tax applies – which is most provinces except Quebec and British Columbia – will receive more money from the Canada Carbon Rebate than what they pay in the fuel levy and related GST, according to the PBO’s latest.

“Broadly speaking, our updated estimates (fiscal impact only) show larger net gains (lower net costs) for average households across income quintiles in backstop provinces compared to our March 2023 distributional analysis,” the PBO report says.

But when economic impacts are factored in, like loss of employment due to the fuel charge, the average household will get back less money than what they pay towards the carbon tax.

“The updated estimates continue to show that the average household across most income quintiles will face a net cost when both fiscal and economic impacts of the federal fuel charge are considered,” the PBO report states.

Like previous reports, the updated PBO analysis does not account for the economic impacts of climate change.

The analysis on the federal fuel charge has been used as a political football on the merits of consumer carbon pricing since its original release.

Conservative Leader Pierre Poilievre, who says he will “axe the tax” if elected as prime minister, said Thursday that the updated report “confirmed everything I've been saying about this horrible tax, this rip off.”

“That's why we need a carbon tax election where Canadians can choose between a 61 cents a litre carbon tax or axing the carbon tax altogether,” Poilievre told reporters on Thursday.

Environment and Climate Change Minister Steven Guilbeault, meanwhile, called the report “an important correction.”

“Now's the time to clear the air of Pierre Poilievre’s big lie to Canadians,” Guilbeault said Thursday. “He's been misleading Canadians. The PBO is very clear. More Canadians get money back from the Canada Carbon Rebate than what they paid.”

Most Canadians, except in Quebec and British Columbia, pay the federal carbon tax on consumer fuels and receive money back through the Canada Carbon Rebate on a quarterly basis.

This past April, the carbon price increased from $65 per tonne to $80 per tonne, costing drivers an extra 3.3 cents per litre at the pump. The carbon tax is scheduled to increase another $15 each year until it reaches $170 a tonne in 2030, according to federal government targets.

Aside from Poilievre, the carbon price has also received significant pushback from most premiers, including Liberal Newfoundland and Labrador Premier Andrew Furey. NDP leader Jagmeet Singh has even signalled he could be distancing himself from the policy, saying his party is working on a climate plan that wouldn’t put the burden on the backs of workers. 

Despite its unpopularity, Guilbeault said in an interview with CTV Power Play in September that the federal government has “no intention” of pausing the next planned increase to the carbon tax, but admitted it might not be necessary beyond 2030 if emissions go down.

“If we come to the conclusion that we don't need to keep increasing it and that emissions will continue to go down because of all the other things we're doing, then there's no reason to continue increasing it,” he said.