What if ‘Axe the Tax’ leaves most Canadians worse off?

[chuckChuck]

So none of you want to acknowledge or comment on the "hypocrisy and ignorance" of the subsidies to agriculture and oil and gas? No surprise there.

"Looked at across the entire economy, the inflation impact of the carbon tax is small. Earlier this year, Tiff Macklem the Governor of the Bank of Canada, estimated that tax was contributing about 0.15 per cent to inflation. Not large, but not nothing.

However, when most of us think of inflation ([url]https://www.theglobeandmail.com/topics/inflation/[/url]), we don’t think of something that leaves us with more money in our pocket. For example, if the price of bananas goes up by 10 cents a pound at your local grocery store, 100 per cent of that extra 10 cents goes to some combination of farmers, shippers, workers, wholesalers and the grocer. Zero per cent comes back to you. Your wallet is lighter. That’s inflation.

But when the carbon tax rises by 3.3 cents a litre of gasoline next year, that will be returned to Canadians.

And thanks to that rebate system, most people are getting back more than they’re paying out. That is particularly true for lower- and middle-income Canadians.

The rebate, which the Trudeau government has done such a poor job of selling, is known as the Climate Action Incentive Payment. It’s paid quarterly, by direct deposit. For 2022-23, the annual payment for a family of four ranged from $745 in Ontario to $1,079 in Alberta. (Why do Albertans get more? Because Albertans use more carbon.) Rural residents also get a significant top-up.

For most families – about 80 per cent of households, according to the government – the rebate is bigger than the amount of carbon tax paid. The vast majority of lower- and middle-income families come out ahead."

[fjlip]

_"For most families – about 80 per cent of households, according to the government – the rebate is bigger than the amount of carbon tax paid. The vast majority of lower- and middle-income families come out ahead."

So tell us What's the point of it all? A drain on the treasury?

[sumdumguy]

No a drain on you and me

[chuckChuck]

For most families – about 80 per cent of households, according to the government – the rebate is bigger than the amount of carbon tax paid. The vast majority of lower- and middle-income families come out ahead."

The Saskatchewan program provides an annual credit of:

• $680 for an individual
• $340 for a spouse or common-law partner
• $170 per child under 19
• $340 for the first child in a single-parent family

The Alberta program provides an annual credit of:

• $772 for an individual
• $386 for a spouse or common-law partner
• $193 per child under 19
• $386 for the first child in a single-parent family

The CAIP includes a rural supplement of 10 per cent of the base amount for residents of small and rural communities.

[Hamloc]

From the Parliament budget officer. The net cost in each province of the carbon tax after rebates.

[Guest]

And chucky will say thats not a credible source , some leftard prof much more reliable

[chuckChuck]

Hamloc your post is from the Canadian Taxpayers Federation's numbers not the Parlimentary budget officer!

[url]https://www.theglobeandmail.com/opinion/article-no-that-pbo-study-doesnt-prove-the-carbon-tax-is-a-stealth-cash-grab/[/url]

No, that PBO study doesn’t prove the carbon tax is a stealth cash grab

Andrew Coyne
April 4th, 2023

AHA! cried the voices of the right, in unison. Aha! At last, proof of what we’ve been saying all along – proof that the carbon tax is nothing more than a revenue grab, proof that when it said most households would receive more in the federal carbon tax rebate than they paid in the tax, the Liberal government was lying.

The occasion for all of this simultaneous exhalation of air was the release of a report ([url]https://www.pbo-dpb.ca/en/publications/RP-2223-028-S--distributional-analysis-federal-fuel-charge-under-2030-emissions-reduction-plan--analyse-distributive-redevance-federale-combustibles-dans-cadre-plan-reduction-emissions-2030[/url]) by the Office of the Parliamentary Budget Officer: A Distributional Analysis of the Federal Fuel Charge under the 2030 Emissions Reduction Plan. According to a report by CTV, the study shows that, by 2030-31, “most households will see a net loss, despite the rebate payments offered by the federal government to offset the surcharge.”

It quotes the Parliamentary Budget Officer himself, Yves Giroux, in a statement accompanying the report: “Most households will pay more in fuel charges and GST …than they will receive in Climate Action Incentive payments.” The hapless federal Environment Minister, Steven Guilbeault, was even goaded into admitting as much on CTV’s Question Period. “On average, households will pay more,” he conceded.

Aha! said the editors of the Toronto Sun. Aha! said Rex Murphy in the National Post. It’s all just a “senseless money grab.” Just as we’ve been saying all along.

Only … that’s not what the study says. Far from refuting the government’s claim, in fact it confirms it. In six of the seven provinces where the federal carbon tax applies, the PBO estimates that, even at the $170 per tonne the tax will have reached by then (it was recently increased to $65 a tonne), 80 per cent of households will get back more in rebates than they pay in the tax. The only exception is Nova Scotia, where it is more like 50 per cent. But even in Nova Scotia, the average household is a net beneficiary.

(Wait, what about that sneaky GST you have to pay on the carbon tax – the tax on tax? Does that tip the balance? No: the PBO’s numbers include the GST.)

Whence all the ahas, then? Because the report finds that if you also include the economic impact of the tax (like almost any tax, it has some effect on economic activity), the combined effect will be to reduce household after-tax incomes slightly (1 or 2 per cent) over the next seven years. Not from what they are now, but from what they would have otherwise been – what they would have grown to by then.

Mind you, the losses will fall disproportionately, according to the PBO, on those earning above-average incomes. But still: the average household will see a net loss, or rather a smaller rise in their disposable income than they would otherwise.

Aha! Trudeau lied, people cried!

But that is to rebut a claim that was never made. It was never claimed that 80 per cent of households would see their incomes rise because of the tax – only that they would get all of the tax and more rebated back to them. As in fact they do, and will.

This government has enough actual lies on its record without inventing new ones. There is simply no construction of the facts that supports the “money grab” claim. Indeed, as long as we’re including economic impacts, it is worth noting that the PBO projects a net loss to the federal treasury, taking reduced income tax revenues into account, on the order of $7-billion annually, by the time the tax is fully phased in.

So the aha-ers are just as wrong as they ever were. But there’s a larger sense in which they are even wronger. To say that incomes will be lower “than they otherwise would have been” presumes an “otherwise” in which we do nothing – not only that the tax would not apply, but that nothing else would apply in its place. That scenario does not exist, and no one is proposing it.

The alternative to the carbon tax is not nothing, but something else – subsidies and regulations. And the cost of these, as every study shows – costs that are paid not by “the economy” or “the big polluters” but by households – is multiple times that of carbon pricing.

More to the point, under the alternatives, there are no rebates. Not only are the costs greater than under a carbon tax, but 100 per cent of them fall on households. The rebates are zero.

That’s the proper benchmark, in estimating the cost of the carbon tax: not against some fantasy do-nothing scenario, but against the likely alternatives. Which would have been a more useful, and far less misleading study than the one the PBO produced.

[Hamloc]

From the actual report.

[Hamloc]

Looking at the numbers in the report the net result is the same, I should have realized you wouldn’t accept actual numbers. The report also shows a net decrease in government revenue due to the carbon tax.

[chuckChuck]

Hamloc you posted the numbers which include the PBOs economy wide economic impact forecast in 2030,31. But in terms of the dollar value of actual tax paid and rebates "80 per cent of households will still get back more in rebates than they pay in the tax."

"the combined effect will be to reduce household after-tax incomes slightly (1 or 2 per cent) over the next seven years."


Coyne expalins it like this:
Whence all the ahas, then? Because the report finds that if you also include the economic impact of the tax (like almost any tax, it has some effect on economic activity), the combined effect will be to reduce household after-tax incomes slightly (1 or 2 per cent) over the next seven years. Not from what they are now, but from what they would have otherwise been – what they would have grown to by then.

Mind you, the losses will fall disproportionately, according to the PBO, on those earning above-average incomes. But still: the average household will see a net loss, or rather a smaller rise in their disposable income than they would otherwise."

Aha! Trudeau lied, people cried!

But that is to rebut a claim that was never made. It was never claimed that 80 per cent of households would see their incomes rise because of the tax – only that they would get all of the tax and more rebated back to them. As in fact they do, and will."


Posted as written:
"Aha! said the editors of the Toronto Sun. Aha! said Rex Murphy in the National Post. It’s all just a “senseless money grab.” Just as we’ve been saying all along.

Only … that’s not what the study says. Far from refuting the government’s claim, in fact it confirms it. In six of the seven provinces where the federal carbon tax applies, the PBO estimates that, even at the $170 per tonne the tax will have reached by then (it was recently increased to $65 a tonne), 80 per cent of households will get back more in rebates than they pay in the tax. The only exception is Nova Scotia, where it is more like 50 per cent. But even in Nova Scotia, the average household is a net beneficiary.

(Wait, what about that sneaky GST you have to pay on the carbon tax – the tax on tax? Does that tip the balance? No: the PBO’s numbers include the GST.)

Whence all the ahas, then? Because the report finds that if you also include the economic impact of the tax (like almost any tax, it has some effect on economic activity), the combined effect will be to reduce household after-tax incomes slightly (1 or 2 per cent) over the next seven years. Not from what they are now, but from what they would have otherwise been – what they would have grown to by then.

Mind you, the losses will fall disproportionately, according to the PBO, on those earning above-average incomes. But still: the average household will see a net loss, or rather a smaller rise in their disposable income than they would otherwise.

Aha! Trudeau lied, people cried!

But that is to rebut a claim that was never made. It was never claimed that 80 per cent of households would see their incomes rise because of the tax – only that they would get all of the tax and more rebated back to them. As in fact they do, and will.

[Hamloc]

Say what you will Chuck2, what matters is at the end of the day when all costs and benefits are taken into account the carbon tax is a net Cost not a net benefit!! That simple.

[chuckChuck]

But you and Crypto don't tell the whole story.

Any measures to reduce emissions will have a cost to the economy.

And climate change is also already a cost to the economy. The increase in floods, droughts and forest fires all produce increased costs.

But when it comes to the carbon tax 80% of households are getting the actual tax back.

[Guest]

But you and Crypto don't tell the whole story.

Any measures to reduce emissions will have a cost to the economy.

And climate change is also already a cost to the economy. The increase in floods, droughts and forest fires all produce increased costs.

But when it comes to the carbon tax 80% of households are getting the actual tax back.

You do realize we share the same air as China and India ? Don’t you ?……

[cropgrower]

and canada makes 1.5% of the worlds emissions ! madness suported be simpeltons

[Hamloc]

But you and Crypto don't tell the whole story.

Any measures to reduce emissions will have a cost to the economy.

And climate change is also already a cost to the economy. The increase in floods, droughts and forest fires all produce increased costs.

But when it comes to the carbon tax 80% of households are getting the actual tax back.

Chuck2, the title of your thread is “What if ‘Axe the tax’ leaves Canadians worse off.” So now your saying “any measure to reduce emissions will have a cost to the economy.” And instead of saying Canadians are worse off your changing your statement to 80% of households are getting the actual tax back. I thought the premise was low income households got more than what they payed back? How does the carbon tax incentivize change if 80% get the tax back or for that matter lower income Canadians who benefit from the rebates according to the PBO? Are only 20% of Canadians supposed to change what they do? Are the carbon tax incentives just a low income subsidy not a climate policy? What if the tax wasn’t charged 80% wouldn’t need the tax back because they wouldn’t have payed it!!

As for your opinion that any reduction in emissions costs money. Hmmm, now your admitting utilizing solar and wind generation increases costs as AB5 has maintained all along? I thought electric cars were going to save us money. But of course they cost more to buy, they weigh on average at 30% more than their ICE equivalents and then there is all those government subsidies. Curious we don’t have to pay companies to build gas stations but some reason electric car chargers must be built or subsidized by government. I could go on but why bother, your opinion won’t change and neither will mine. Curious though, I wrote all that without insults or name calling, imagine.