Business
Carbon Tax poll reveals what we already knew
Written By Dan McTeague of Canadians for Affordable Energy
The chickens are coming home to roost for the Trudeau government.
Last month (August 6th) Nanos Research released a new poll showing that two thirds of Canadians think that now is a bad time to increase the Carbon Tax. This is not exactly a shocking revelation. It really didn’t take a poll to determine what everyday Canadians already know. Adding a Carbon Tax to a struggling economy is a bad idea.
Anyone who has gone to the grocery store lately, or has filled up their vehicle, knows that the cost of living has skyrocketed. Social media is flooded with Canadians sharing their stories of how they are at the breaking point with the cost of living. It doesn’t take an economist to know that higher consumption taxes have the immediate effect of increasing the cost of everything. That has not stopped the green Agenda driven Trudeau government that seems determined to make life unaffordable for Canadians.
But back to that Nanos poll –
Let’s break this down a bit more to understand what this poll is really saying about how Canadians feel about Carbon Taxes.
First, it is evident that Nanos is approaching this poll with a clear bias in favor of Carbon Taxes. Participants were asked three (3) questions: 1) Do you think a carbon tax on things like gas is an effective, somewhat effective, somewhat ineffective, or ineffective way to encourage people to use less fuel? 2) Is now a very good, good, average, poor or very poor time to increase carbon taxes on things like gas? 3) On a scale from 0 to 10 where 0 is not at all effective and 10 is extremely effective, how effective do you think the federal government’s Carbon Pollution Pricing system, often called the carbon tax, is to combat climate change?
Notice the poll did not ask Canadians whether or not they think Carbon Taxes are a good idea or whether they want them at all.
The assumption is that Canadians buy into the narrative that climate change is real, and a “real problem” that requires government action, that “using less carbon” such as fuel is a key, if not the key, to reducing “carbon consumption”.
We know not every Canadian believes this; but the Nanos poll didn’t even ask.
That said, looking at the results of what they did ask, two thirds of Canadians say that now is a bad time to increase carbon taxes.
In the prairie provinces, this number was 79% and in Atlantic Canada 73% of respondents said the timing is “poor” or “very poor”.
Of even greater political significance: in Ontario, where the next federal election will likely be decided, a whopping 68.7% of respondents said that now is a bad time to increase the Carbon Tax. And yet Justin Trudeau keeps increasing this most hated tax.
In terms of effectiveness, 64.3% in Ontario think that a new carbon tax is not effective at encouraging people to use less fuel. This comes as no surprise. A majority of Canadians rely on their vehicles to get to work, the grocery store, kids practices, and family vacations. Normal daily activities for life in Canada. In most cases not driving is not an option. It only means that getting there is more expensive, and other items in the budget need to be sacrificed instead.
And as we know the Carbon Tax is one of the culprits for higher prices.
Conservative MP Kyle Seeback articulated it well in the House of Commons when he explained to Trudeau’s Environment Minister Stephen Guilbeault how the Carbon Tax is driving up inflation. “Mr. Speaker, it is incredible, he actually does not know how food ends up on his plate. The farmer pays a carbon tax, the truck that picks up the farmer’s food pays a carbon tax to take it to the processor, the processor pays a carbon tax, the truck that picks it up from the processor to take it to the grocery store pays a carbon tax, the grocery store pays a carbon tax and then Canadians cannot pay for food.”
Canadians for Affordable Energy has been advocating for affordability since 2017 and have known that Carbon Taxes are a threat to affordable energy in Canada and will drive up the cost of everything. And that is exactly what is happening. Fuel prices are skyrocketing, food prices are at record highs, and Canadians are struggling to make ends meet. Energy affordability is the key to success in Canada and therefore it is the view of CAE that there is never a good time to implement a Carbon Tax. Full stop.
Canadians are finally starting to connect the dots on a path that leads directly back to bad energy and environmental policies. Policies that have stifled our resource economy and punished working Canadians. Policies that are hitting Canadians’ pocketbooks really hard, especially when trying to fill up their vehicles and feed their families. Policies that won’t even help the environment.
Pierre Poilievre and his Conservative government have committed to scrapping the carbon tax. Let’s hope they follow through on this promise if they come into power in the next election. Because not all Canadians buy the narrative that Carbon Taxes are a good thing.
Alberta
Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn
From the Fraser Institute
By Tegan Hill
According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.
The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.
For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).
And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.
In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.
This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.
Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.
Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.
Of course, if the government falls back into deficit there are implications for everyday Albertans.
When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.
According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.
Author:
Alberta
Alberta fiscal update: second quarter is outstanding, challenges ahead
Alberta maintains a balanced budget while ensuring pressures from population growth are being addressed.
Alberta faces rising risks, including ongoing resource volatility, geopolitical instability and rising pressures at home. With more than 450,000 people moving to Alberta in the last three years, the province has allocated hundreds of millions of dollars to address these pressures and ensure Albertans continue to be supported. Alberta’s government is determined to make every dollar go further with targeted and responsible spending on the priorities of Albertans.
The province is forecasting a $4.6 billion surplus at the end of 2024-25, up from the $2.9 billion first quarter forecast and $355 million from budget, due mainly to higher revenue from personal income taxes and non-renewable resources.
Given the current significant uncertainty in global geopolitics and energy markets, Alberta’s government must continue to make prudent choices to meet its responsibilities, including ongoing bargaining for thousands of public sector workers, fast-tracking school construction, cutting personal income taxes and ensuring Alberta’s surging population has access to high-quality health care, education and other public services.
“These are challenging times, but I believe Alberta is up to the challenge. By being intentional with every dollar, we can boost our prosperity and quality of life now and in the future.”
Midway through 2024-25, the province has stepped up to boost support to Albertans this fiscal year through key investments, including:
- $716 million to Health for physician compensation incentives and to help Alberta Health Services provide services to a growing and aging population.
- $125 million to address enrollment growth pressures in Alberta schools.
- $847 million for disaster and emergency assistance, including:
- $647 million to fight the Jasper wildfires
- $163 million for the Wildfire Disaster Recovery Program
- $5 million to support the municipality of Jasper (half to help with tourism recovery)
- $12 million to match donations to the Canadian Red Cross
- $20 million for emergency evacuation payments to evacuees in communities impacted by wildfires
- $240 million more for Seniors, Community and Social Services to support social support programs.
Looking forward, the province has adjusted its forecast for the price of oil to US$74 per barrel of West Texas Intermediate. It expects to earn more for its crude oil, with a narrowing of the light-heavy differential around US$14 per barrel, higher demand for heavier crude grades and a growing export capacity through the Trans Mountain pipeline. Despite these changes, Alberta still risks running a deficit in the coming fiscal year should oil prices continue to drop below $70 per barrel.
After a 4.4 per cent surge in the 2024 census year, Alberta’s population growth is expected to slow to 2.5 per cent in 2025, lower than the first quarter forecast of 3.2 per cent growth because of reduced immigration and non-permanent residents targets by the federal government.
Revenue
Revenue for 2024-25 is forecast at $77.9 billion, an increase of $4.4 billion from Budget 2024, including:
- $16.6 billion forecast from personal income taxes, up from $15.6 billion at budget.
- $20.3 billion forecast from non-renewable resource revenue, up from $17.3 billion at budget.
Expense
Expense for 2024-25 is forecast at $73.3 billion, an increase of $143 million from Budget 2024.
Surplus cash
After calculations and adjustments, $2.9 billion in surplus cash is forecast.
- $1.4 billion or half will pay debt coming due.
- The other half, or $1.4 billion, will be put into the Alberta Fund, which can be spent on further debt repayment, deposited into the Alberta Heritage Savings Trust Fund and/or spent on one-time initiatives.
Contingency
Of the $2 billion contingency included in Budget 2024, a preliminary allocation of $1.7 billion is forecast.
Alberta Heritage Savings Trust Fund
The Alberta Heritage Savings Trust Fund grew in the second quarter to a market value of $24.3 billion as of Sept. 30, 2024, up from $23.4 billion at the end of the first quarter.
- The fund earned a 3.7 per cent return from July to September with a net investment income of $616 million, up from the 2.1 per cent return during the first quarter.
Debt
Taxpayer-supported debt is forecast at $84 billion as of March 31, 2025, $3.8 billion less than estimated in the budget because the higher surplus has lowered borrowing requirements.
- Debt servicing costs are forecast at $3.2 billion, down $216 million from budget.
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