From the Canadian Taxpayers Federation

By Ryan Thorpe

The cost of administering the federal carbon tax and rebate scheme has risen to $283 million since it was imposed in 2019, according to government records obtained by the Canadian Taxpayers Federation.

By 2030, the cost of administering the carbon tax is expected to total $796 million, according to the records.

“Not only does the carbon tax make our gas, heating and groceries more expensive, but taxpayers are also hit with a big bill to fund Prime Minister Justin Trudeau’s battalion of carbon tax bureaucrats,” said Franco Terrazzano, CTF Federal Director. “Trudeau should make life more affordable and slash the cost of the bureaucracy by scrapping the carbon tax.”

The government records were released in response to an order paper question from Conservative MP John Barlow (Foothills).

The carbon tax and rebate scheme cost taxpayers $84 million in 2023, according to the records.

There were 461 federal bureaucrats tasked with administering the carbon tax and rebate scheme last year, according to the records.

The CTF previously reported administering the carbon tax cost taxpayers $199 million between 2019 and 2022.

Projected costs for administering the carbon tax and rebate scheme between 2024 and 2030 are $513 million, according to the records.

That would bring total administration costs for the carbon tax and rebate scheme up to $796 million by 2030.

But the true hit to taxpayers is even higher, as the records do not include costs associated with the Fuel Charge Tax Credit for Farmers or the Canada Carbon Rebate for Small Businesses.

“It’s magic math to believe the feds can raise taxes, skim hundreds-of-millions off the top to hire hundreds of new bureaucrats and then somehow make everyone better off with rebates,” Terrazzano said.

The carbon tax will cost the average household up to $399 this year more than the rebates, according to the Parliamentary Budget Officer, the government’s independent, non-partisan budget watchdog.

The PBO also notes that, “Canada’s own emissions are not large enough to materially impact climate change.”

The government also charges its GST on top of the carbon tax. The PBO report shows this carbon tax-on-tax will cost taxpayers $400 million this year. That money isn’t rebated back to Canadians.

The carbon tax currently costs 17 cents per litre of gasoline, 21 cents per litre of diesel and 15 cents per cubic metre of natural gas.

By 2030, the carbon tax will cost 37 cents per litre of gasoline, 45 cents per litre of diesel and 32 cents per cubic metre of natural gas.

From Resource Works

Ottawa’s emissions cap for oil and gas aims to cut emissions but risks raising costs for consumers and disrupting industry stability.

Ottawa has brought down a new emissions cap for the oil and gas industry, with a mandate to reduce emissions by 35 percent from 2019 levels by 2030 to support the federal government’s climate targets. While the federal government is celebrating the cap as a big step towards a more sustainable future, it is going to make life harder for consumers and businesses alike.

This cap is coming in at a time when the oil sector is finally gaining greater stability due to the expanded Trans Mountain pipeline (TMX), and the mandate would undermine that progress and press greater costs upon households and industries that are already adjusting to high inflation and uncertainty in world markets.

Now that TMX is operational, Canada’s oil producers have grown their access to international markets, most importantly in Asia and the West Coast of the United States. Much-needed price stability now exists for Western Canadian Select (WCS), cutting the discount against the U.S. West Texas Intermediate benchmark, enabling Canadian oil to compete more effectively.

Newfound stability means that Canadian consumers and businesses have benefited from slightly lower prices, and that industry has grown less dependent on a more limited domestic demand. However, Ottawa’s emissions cap does threaten this new balance, and the sector now has to deal with compliance costs that could be passed down to consumers.

In order to meet the cap’s targets, Canadian oil producers must heavily invest in carbon capture and storage (CCS) technologies, which is costly but essential. Major CCS projects include Shell’s Quest and the Alberta Carbon Trunk Line, both of which are already operational.

The Pathways Alliance is a coalition of six major oil sands companies and is preparing to invest in one of the world’s largest networks for carbon storage. These efforts are crucial for reducing emissions, despite requiring vast amounts of capital.

Those in the industry are worrying that the emissions cap will push resources away from production and, instead, towards compliance, adding costs that will be borne by fuel prices and other consumer products.

Ottawa has portrayed the cap as an essential measure for meeting the federal government’s climate goals, with Environment Minister Jonathan Wilkinson labeling it “technically achievable.” Nonetheless, industry players argue that the timeline does not align with the practicalities of scaling CCS and other strategies aimed at decarbonizing.

Strathcona Resources executive chairman Adam Waterous pointed out the “stroke-of-the-pen” risk, in which shifting political landscapes imperil ongoing investments in carbon capture. Numerous oil producers feel that without certainty in carbon price stability, Ottawa’s cap will result in an unstable business environment that will push investment away from production.

Business leaders do not share the federal government’s optimism about the cap and see it as a one-sided approach that fails to reckon with market realities. The Pathways Alliance, which includes companies like Suncor Energy and Canadian Natural Resources, has been frustrated in its multiple attempts to get federal support to fund its $16.5-billion CCS project.

Rather than imposing these new limits, energy industry advocates argue that the government should provide targeted incentives like “carbon contracts for difference” (CCfDs), which help to stabilize carbon credit prices and reduce financial risk among investors. These measures would enable the energy sector to decarbonize without putting a greater burden on consumers.

The cap’s timing also raises concerns about the Canada-U.S. relationship. Canada has traditionally been a stable supplier of energy and helps to bolster U.S. energy security. However, as the U.S. increases its reliance on Canadian oil, the cap could disrupt this trade relationship. Lowered production levels would leave the economies of both the U.S. and Canada vulnerable, potentially disrupting energy prices and supply stability.

For households across Canada, the emissions cap could mean further financial strain. The higher costs of compliance passed to oil producers will mean higher prices at the pump and more expensive heating costs at a time when Canadian consumers are already struggling financially.

Businesses will also face increasing operating costs, which will be passed down to consumers via more expensive goods and services. Furthermore, higher costs and reduced production will erode Canada’s competitive advantage in the global energy market, slowing economic growth and risking job losses in the energy sector.

So, while Ottawa can laud its emissions cap as a necessary action on the climate, the implications for consumers and businesses are tremendous. Working with industry to find pragmatic, collaborative solutions is how Ottawa can avoid creating more financial burdens for Canadians.