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Inflation

Chrystia Freeland refuses to answer how much Trudeau government has collected via carbon tax

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From LifeSiteNews

By Clare Marie Merkowsky

Deputy Prime Minister and Finance Minister Chrystia Freeland continues to claim that the revenue from the carbon tax ‘goes back to Canadians’ despite data showing otherwise.

Canadian Deputy Prime Minister and Finance Minister Chrystia Freeland has refused to reveal how much Liberals have collected via the unpopular carbon tax, which is set to go up again on April 1.  

During a March 21 session in the House of Commons, Conservative Member of Parliament (MP) Marty Morantz questioned Freeland regarding how much the Liberal government has taken in through the carbon tax.  

“How much has your government collected in carbon taxes?” Morantz asked.  

Freeland responded by dodging the question, stating, “[This is] also an opportunity for me to point out that Manitoba families will be getting $1,200 this year.” 

“Again, minister, if I could just have the number [of] how much you’ve collected in carbon taxes,” Morantz pressed. 

Freeland again refused to answer, instead claiming that the “key point” is that the “price on pollution” is “revenue neutral.”

As Morantz persisted in his question, Freeland alleged that the revenue from the carbon tax is “all money that goes back to Canadians.” 

However, this statement has been proven untrue as the Parliamentary Budget Officer recently revealed that the government rebates are insufficient to cover the rising costs of fuel under Trudeau’s carbon tax, causing many to wonder where their money is actually going.

According to records published in December, the carbon tax cost Canadians nearly $200 million in paperwork since Prime Minister Justin Trudeau introduced the fuel charge in 2019. 

The costs are only expected to rise, as a recent report revealed that a carbon tax of more than $350 per tonne is needed to reach Trudeau’s net-zero goals by 2050.   

Currently, Canadians living in provinces under the federal carbon pricing scheme pay $65 per tonne, but the Trudeau government has a goal of $170 per tonne by 2030.    

Additionally, Trudeau has refused to pause the carbon tax hike scheduled for April 1, despite seven out of ten provincial premiers and 70 percent of Canadians pleading with him to halt his plan.   

Meanwhile, Trudeau and his cabinet continue to attend lavish retreats, with a recent Liberal retreat costing taxpayers nearly $500,000.   

During a media interview following the nearly $500,000 retreat, Trudeau told Canadians struggling with the high cost of living that times are also difficult for politicians.  

“Yeah, people are facing tough times, and yes, everyone is finding it difficult right now. And as leaders, MPs, parliamentarians of all types, part of our job is to be there to take it, to support it as Canadians are worried and anxious, and put out those solutions,” he said.   

“So yeah, it’s not an easy time to be a politician,” Trudeau lamented.

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Business

Ottawa’s GST break and rebate cheques amount to bad policy

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From the Fraser Institute

By Jake Fuss and Grady Munro

On Thursday, the House of Commons passed legislation (tabled by the Trudeau government) that would temporarily suspend the federal Goods and Services Tax (GST) on select items from December 14 to February 15 at an estimated cost of $1.6 billion, as part of the government’s “more money in your pocket” plan. The legislation now goes to the Senate for approval.

The government has delayed a separate proposal—to give Canadians $250 rebate cheques—in light of NDP demands to expand eligibility to include seniors. The original proposal would have sent cheques to an estimated 18.7 million Canadians (who worked in 2023 and earned $150,000 or less) at a cost of $4.7 billion. While aimed at all Canadians, this proposal is eerily similar to the recent move by Ontario’s Ford government, which plans to send $200 cheques to Ontarians. And again, it’s just bad policy.

Why?

Consider this. During the recent discussion about increasing Old Age Security payments by 10 per cent for seniors aged 65 to 74, former Bank of Canada governor David Dodge said, “The last thing that we need to be spending money on at this point in time is boosting consumption for relatively well-off people.” This critique also applies to the Trudeau government’s $250 rebate cheques, which would go to many well-off Canadians. Indeed, based on the government’s original proposal, a couple earning a combined household income of up to $300,000 could receive these cheques.

Moreover, because onetime payouts and temporary tax breaks don’t incentivize people to work and invest, they don’t help raise living standards. But permanent tax cuts, such as reducing personal income tax rates or lowering capital gains taxes, would provide a stronger incentive for Canadians to work more and make investments because they get to keep more of the money they earn. That would help drive economic growth, create jobs and provide more economic opportunities for workers across the income spectrum.

In fact, the Trudeau government’s plan may actually hurt economic growth in the long run. The government is expected to run budget deficits for the foreseeable future, and will likely borrow the billions needed to pay for the GST break and $250 cheques. In other words, this “relief” package will likely increase the federal deficit in 2024 and potentially 2025. By borrowing more money, the government will increase the tax burden on future generations of Canadians who ultimately must pay off today’s debt. And just as lower taxes improve economic incentives, this higher future tax burden will worsen incentives and likely stifle economic growth and reduce living standards.

Don’t be deceived. While it’s nice to get a cheque in the mail and have a couple months free of the GST for some items, the Trudeau government’s “more money in your pocket” plan is bad policy.

Jake Fuss

Director, Fiscal Studies, Fraser Institute
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Automotive

Canada should heed Germany’s destructive climate policies

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From the Fraser Institute

By Kenneth P. Green

Volkswagen may soon close three vehicle factories, cut 10,000 jobs and impose steep across-the-board pay reductions. Volkswagen has avoided involuntary layoffs for 30 years and hasn’t shuttered a factory in its home country in its 87-year history.

According to a recent report in the Wall Street Journal (WSJ), Germany’s climate policies—chasing after “net-zero” greenhouse gas emissions, aggressive electric vehicle sales mandates, and moving electricity production away from fossil fuels to renewable sources such as wind and solar—has imperiled Germany’s massive auto-sector, the central pillar of its economy.

Specifically, Volkswagen may soon close three vehicle factories, cut 10,000 jobs and impose steep across-the-board pay reductions. Volkswagen has avoided involuntary layoffs for 30 years and hasn’t shuttered a factory in its home country in its 87-year history.

While politicians in Germany blame this downturn to poor management of the company, the WSJ blames Germany’s climate policies, which are largely mimicked by Canada. “Germany’s auto industry is trapped in a vise between higher energy prices that drive up the cost of production, and electric-vehicle mandates that drive down sales.” Due to Germany’s intensive switch from coal and nuclear electricity production to renewables, electricity prices for large industrial users in Germany are well above the European Union average, and above prices in the United States, China and Japan.

Then there’s Germany’s electric vehicle (EV) mandates. As with Canada, Germany (under EU policy), requires that EVs constitute a higher share of vehicle sales each year, with internal-combustion engines phased out by 2035. The WSJ reports: “Stellantis has warned that it may also scale back car production to avoid running afoul of the Brussels EV mandate, and Ford is cutting several thousand jobs in Europe in its shift to EVs.” Germany’s climate policies are the “worst act of economic masochism in the West since the 1930s.” And it’s an act that Canada’s government seeks to emulate, with its own “net-zero” emission policies, clean electricity regulations and EV mandates.

Like Germany, Canada’s drive to “decarbonize” the electricity sector has led to higher prices for industrial users. For example, when Ontario decarbonized its electricity sector (by shuttering coal-fired power generation) from 2008 to 2016, Ontario’s residential electricity costs shot up by 71 per cent, far outpacing the 34 per cent average growth in electricity prices across Canada. The skyrocketing electricity rates also hit the province’s industrial sector. Between 2010 and 2016, large industrial users in Toronto and Ottawa experienced cost spikes of 53 per cent and 46 per cent, respectively, compared to 14 per cent (on average) for the rest of Canada. In 2016, large industrial users in Toronto paid almost three times more than consumers in Montreal and Calgary and almost twice the prices paid by large consumers in Vancouver.

And like Germany, Canada’s EV mandate is already showing painful signs of failure. As reported by CBC, back in April Ford announced that its EV unit lost US$1.3 billion in the first quarter of 2024 alone, selling only 10,000 vehicles in that period. Possibly a good thing, because Ford lost about US$132,000 for every EV it sold in the first three months of the year. Ford and General Motors, are cutting back on EV production, with Ford planning to cut its electric pickup production by half.

Germany’s self-inflicted harms from its great spasm of climate policy masochism, like Canada’s self-inflicted harms from its masochism mimicry, should prompt Canada’s politicians to take a deep breath and shift away from economically destructive climate policies such as net-zero and EV mandates.

Kenneth P. Green

Senior Fellow, Fraser Institute
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