Should carbon price hikes go ahead amid high cost of living? Experts say yes

Planned increases in the carbon price should go ahead as planned, two economists say, even as consumers across Canada are struggling amid the rising cost-of-living and feeling the impacts of a Bank of Canada rate increase.

In an interview with The West Block‘s Mercedes Stephenson, economists pointed to the wildfire smoke engulfing large parts of the continent as a reminder that the climate crisis is still unfolding.

“I think at a time when the country is burning and we’re not sure what the future is existentially, we need to do something very serious about climate change,” Armine Yalnizyan, Atkinson Fellow on the Future of Workers, said.

She added, “And a carbon tax is something that had had at one point cross-party support. So, let’s just do something. Let’s not stop doing the things we can do.”

2:08 Climate action comes with costs, Canada’s budget watchdog says

Kevin Page, former parliamentary budget officer, said it was important to take the long view on the issue of carbon pricing.

“We need to have prices on carbon. These prices need to be increasing.,” said Page, now president and CEO of the Institute of Fiscal Studies and Democracy at the University of Ottawa.

“We need to have this sort of forward guidance on what these prices are going to be. So, it’s (increases in carbon taxes) not something I would take away even in this period. We need to make these adjustments. It’s a long-term consideration.”

The fuel charge in Ontario, Manitoba, Saskatchewan, Alberta, Yukon and Nunavut went up by 30 per cent in April. The next hike is scheduled to go into effect in Newfoundland and Labrador, Nova Scotia and Prince Edward Island on July 1.

According to Emergency Preparedness Minister Bill Blair, as of this week, 414 active fires were burning across the country and 239 were out of control.

These fires forced more than 20,000 Canadians out of their homes.

In 2023, 2,293 wildfires have torched 3.8 million hectares of land.

This year, Canada could be on track to having a record level of land burnt due to wildfires. Environmentalists say climate change has made this year’s wildfires worse.