Prime minister Mark Carney said on Friday that he ended the consumer carbon pricepraising the move as helping the “hard Canadians”.
Although this has made growing calls from ministers of ministers across the country – both progressive and conservatives – some economists say that Canadians will notice a difference at the same time at certain costs and also in lack of discounts.
The price of carbon aimed to put a price on pollution to bring people to use fewer fossil fuels, but it has been confronted with criticisms for years and has seen repression at the provincial and federal levels.
The federal government has tried to compensate for its carbon price plan with the delivery of Canada’s carbon, which saw quarterly payments in tax franchise delivered to eligible Canadians. Ottawa said that around 80% of Canadians get more discounts than they pay in carbon prices.
A family of four people in Ontario living in a city, for example, could receive up to $ 1,120 per year thanks to the discounts. A rural family of four people would see the discounts on T0 $ 1,344.
These Alberta families would cost $ 1,800 in urban areas and $ 2,160 in rural communities.
According to Moshe Lander, an Alberta economist who also teaches at Concordia University, the reduction in carbon prices could mean a drop in gas prices from around 10 cents to 15 cents per liter. But with the discount also canceled – one more payment in April is still planned – Lander said that Canadians will probably have positive and negative impacts.
“You are not going to get this check every three months and it will leave a little hole,” he said. “And when Canadians are concerned about the problems of affordability of the cost of living, this is a problem.”
Where have Canadians saw the carbon price?
The carbon price has been a polarizing problem over the years since its creation.
There are two parts: a price of the consumer carbon, which is a charge on fossil fuels and an industrial system.
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The federal government set standard criteria for both in 2019. The provinces and the territories then designed their own programs to meet federal references Or ask for federal security net.
This federal security net for consumption and industrial systems applies to Yukon, Nunavut, Manitoba and Prince Edward Island. Provincial or territorial consumer and industrial systems apply in British Columbia, Quebec and the Northwest Territories.
The remaining provinces have their own industrial systems but use the price of federal carbon for consumers. These provinces are Alberta, Saskatchewan, Ontario, New Brunswick, Nova Scotia and Newfoundland and Labrador.
About 17 cents is added to gas costs on average compared to the price of consumer carbon, the price of carbon located at $ 80 per tonne after the increase in last year.
In the provinces and territories that have used the federal carbon carbon price, the perceived tax was returned to Canadians in the form of carbon delivery of Canada.
The discounts, however, have not reprimanded fears that higher prices for the pump or on energy bills could increase the costs of essential elements such as food and transport, the price of carbon filtered by the economy.
So what’s going on now?
“All kinds of things are shipped either by train or by truck or by plane, so all kinds of prices will readjust,” said Christopher Ragan, professor of economics at Max Bell School of Policy at McGill University.
“Most consumers have not noticed it when they increased because they have increased by very small quantities and different quantities depending on the carbon intensity in the supply chain. So now they will come back, but they will take a while to come back and it will not be noticed either.”
A Report by the parliamentary budget agent Last year estimated that Canadians would save a few hundred dollars during the year 2025-26, depending on where they lived if the carbon price was eliminated.
Ontario’s average family, for example, would save around $ 477, while a similar family in Saskatchewan would see savings of around $ 133, according to estimates.
“Irony is that even if most consumers will pay less in advance, they can actually find themselves overall, because many households, especially low-income households, are going more in the discounts they are currently paying at the moment,” said Hadrian Mertins-Kirkwood, principal researcher of the Canadian Center for Political Alternatives.
However, Mertins-Kirkwood said that when you consider how much Canadians pay in relation to the amount of recovery, there are not many advantages.
“Due to consumer carbon pricing, households pay hundreds of dollars more a year, in some cases thousands of dollars and again, it is generally higher income families with several vehicles and large houses that would pay these higher amounts,” he said.
“And for the most part, households recover most of this money thanks to the discounts now. So, if there are savings, they will be marginal.”
Lander also notes that if a Canadian family could have paid more at the service station or on their domestic heating bill in advance, when you look all year round, savings may not represent much.
“Even if we had to say that the average family loses $ 150 at $ 500, put it for more than 365 days and you are talking about a few Timbits to a small cup of coffee in Tim Hortons,” he said.
“It is not that the carbon tax made the average Canadian an enormous amount of money and, in this case, the removal of it does not cost a cost or does not benefit from a huge discount that returns.”
– With Sean Boynton files from Global News and Aaron from Andrea
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