The first independent, publicly available analysis of the estimated effects of a $170 per tonne carbon tax in Canada

Fewer Jobs

The higher carbon tax will lead to a 0.8% reduction in employment, which is just over 184,000 jobs nationally. Ontario and Alberta experience the largest percentage decline in jobs, with Quebec and B.C. close behind.

Decline in GDP

The government claims that the higher carbon tax will have “almost zero” impact on GDP. The independent study concluded that GDP (adjusted for inflation) would be reduced by 1.8% even after taking account of the tax rebates. In today’s dollars, that would represent a loss to the economy of $37.8 billion.

Higher deficits

As a result of the declining GDP and job losses, federal and provincial government revenues will be negatively impacted. And so, if the federal government intends to continue rebating 90% of the carbon tax revenue to Canadian households, the combined federal and provincial deficits will have to increase by $22.1 billion every year.

Higher energy costs

A higher tax will result in higher costs. The federal government maintains that by rebating most of the carbon tax revenue, the majority of Canadians will “most likely” find themselves better off. It is noteworthy that energy cost increases fall disproportionately more heavily on lower-income households. The study concluded that, even after taking account of the rebates and the potential stimulative effect of new spending, the purchasing power of ordinary households falls in every province.

Did you know?

Canada’s CO² emissions are about 1.5% of the global total, and the government’s Healthy Environment and Healthy Economy plan would only reduce this by about one quarter, which means global emissions would not fall by much.