Advertisement

Is Canada’s carbon tax working? Experts, advocacy groups weigh in

Click to play video 'Is the carbon tax working?' Is the carbon tax working?
WATCH: It's a step to put a price on pollution and reduce carbon emissions. But is the carbon tax working? Marney Blunt reports – Feb 17, 2021

It’s an effort to put a price on pollution and reduce carbon emissions, but is the carbon tax actually working?

The Canadian Taxpayers Federation says the short answer is “no.”

Kris Sims, the British Columbia director of the Canadian Taxpayers Federation, points to that province’s own carbon tax, which has been in place since 2008, as an example.

Read more: Canada owes $200M across 3 provinces after underestimating carbon tax revenue

“British Columbia has the highest carbon tax in Canada, we are at $40 per tonne. It’s about 8.3 cents per litre of gasoline,” Sims said.

“They also told us it would reduce emissions, they said emissions are going down. Emissions are going up based on the government’s own data. Emissions in British Columbia have gone up 10 per cent in the last three years and five of the last seven years.”

Story continues below advertisement

Sims says it’s likely a similar scenario in provinces under the federal carbon tax program, as the Trudeau government used the BC program as a model.

Click to play video 'Manitoba government to reduce PST to 6 per cent, implement flat $25-per-tonne carbon tax' Manitoba government to reduce PST to 6 per cent, implement flat $25-per-tonne carbon tax
Manitoba government to reduce PST to 6 per cent, implement flat $25-per-tonne carbon tax – Mar 5, 2020

“It’s just a big, expensive failure,” Sims said.

“The carbon tax isn’t working, the emissions are going up, the only thing this is is a cash grab.”

Read more: The carbon tax is going up. Here’s how much more you could pay at the pumps

But some economists say the carbon tax is helping fight climate change, but it’s too soon to know just how the carbon tax will affect emissions in the long run.

“When you tax something, you tend to get less of it,” University of Calgary associate professor of economics Trevor Tombe said. “This is true in gasoline and natural gas use as it is (in) anything else you put a tax on.”

Story continues below advertisement

Tombe says while it will take years to understand the larger picture, we can look to short-term responses to show the effectiveness of the carbon tax, including changes in gasoline consumption for vehicles and natural gas usage for home heating.

“That can be arrived at over time with people choosing different types of vehicles or commuting patterns,” Tombe said.

“And we should also be looking for changes in home heating natural gas usage, and reductions there can be achieved by increased penetration of smart thermostats that can adjust the temperature when you’re not at home, for example. So those are the types of responses we should be looking for the short term.”