June 16th, 2024

Carbon tax designed to reward efficiency

By Letter to the Editor on June 9, 2021.

Is it dishonest to only tell half the truth? On June 4, The Herald published a letter from Franco Terrazzano of the Canadian Taxpayers Federation that accused the Liberals and Conservatives of dishonesty. One can argue about this point, but by only talking about the tax side of the federal carbon tax system, Terrazzano is leaving out an important factor, namely the rebate we all get to offset the cost of the tax. If you take a peek at your 2020 Notice of Assessment from Revenue Canada, you will find a Climate Action Incentive refundable credit. The size of this credit depends on the size of your family, and there is even a bump in the credit if you live in a rural area.
It is genuinely difficult to figure out how much carbon tax you pay, and there are many variables: the vehicle you drive, how much you drive it, your house’s energy efficiency, etc. And a lot of the carbon tax is paid indirectly because suppliers to our groceries and other stores have to pay carbon taxes associated with transport of goods, heating the store, and so on. Then there is the complicated world of electricity… However, this is a question that has been looked at by economists. The University of Calgary’s Trevor Tombe estimated that a $50 per tonne carbon tax would cost a typical household $1100 per year (Maclean’s, Oct. 11, 2016).
This year, the carbon tax is $40, so the corrected estimate for this year is $880. Jennifer Winter, also of the University of Calgary, came up with a very similar number in a report to the Senate Standing Committee on Energy, the Environment and Natural Resources. These estimates are extremely close to the rebate that an urban family of three receives as a Climate Action Incentive payment.
Note that the estimated carbon tax cost is an average over all households: if you’re more energy efficient and generally consume less than average, you will come out ahead.
Moreover, the Federal rebate is adjusted for experience, so if Albertans end up paying more in carbon tax than the feds had estimated, they give us that amount back through the rebate in the next year.
The point is that the system is designed to reward people who are efficient at the expense of those who consume a lot of energy, directly or indirectly. One hopes that this combination of taxation and rebates will encourage people to reduce their carbon footprints.
By leaving out any mention of the rebates, Mr. Terrazzano is telling half the truth.
So is that being honest?
Marc Roussel

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just another revenue stream. we are not paying 100% tax


WE need the same benefit as those that pay no tax or carbon tax but get rebates

M. Roussel

Only people in provinces where the feds charge the carbon tax get the rebates. In the provinces that have their own carbon pricing scheme equivalent to the federal carbon tax, the province determines what to do with the revenue collected.

Seth Anthony

Isn’t the rebate based on income? Something like a family making over $60,000 doesn’t get a rebate? If so, it seems to me that most people and families that pay carbon taxes, will either get no refund or very little.

M. Roussel
Seth Anthony

Yet, the Feds are claiming that “most” will get a little more than they pay. So obviously, there are people who will be getting less than they paid. Who are they? NOTE: (Not that I buy that whole “You’ll get more back than you paid”. Especially given the hidden cost increase in just about all services and goods).

Then of course is the other point to which no one can seem to properly show, let alone prove. That is, how will carbon taxes “save the world”?

Oh yes, then there’s competitiveness. Keep carbon taxing Canadian businesses and watch them reduce wages, lay off people, or move production to the U.S. or China.

In other words, I find no redeeming qualities in a carbon tax. I pretty much only see negative consequences in the whole thing. Kind of like these articles: