Economy
Feds spending $1.7 million pushing carbon tax on other countries
From the Canadian Taxpayers Federation
Author: Ryan Thorpe
The Trudeau government is dumping $1.7 million into a failed bid to get countries around the world to impose carbon taxes, according to access-to-information records obtained by the Canadian Taxpayers Federation.
“All Canadians need to do to know Prime Minister Justin Trudeau’s carbon tax push is an utter failure is look south of the border and see the United States’ refusal to impose their own tax,” said Franco Terrazzano, CTF Federal Director. “If Trudeau can’t even get our biggest trading partner and ally to impose a carbon tax, then why is he wasting money trying to push this unpopular tax around the world?”
The Trudeau government launched the Global Carbon Pricing Challenge at COP26 in 2021.
The program “aims to see 60 per cent of global GHG emissions covered by carbon pricing policies by 2030.” The program website notes “carbon pricing is most effective when more countries adopt it.”
But the results so far are dismal for the government.
Only 24 per cent of global emissions are currently covered by a carbon tax. About 70 per cent of countries do not have a national carbon tax, according to the World Bank.
Three of the four largest emitting countries – the U.S., Russia and India – currently do not have a national carbon tax, according to the World Bank.
“The [climate] community has largely moved into a different framework,” said John Podesta, a long-time Democratic strategist, when asked about whether the Biden administration would impose a carbon tax in the U.S.
Only 12 countries, including Kazakhstan and Chile, have signed onto the Global Carbon Pricing Challenge as “partners,” alongside the European Union. Côte d’Ivoire is listed as the lone “friend” of the program.
There are 195 countries in the world, according to the United Nations.
“This program is a complete failure that’s wasting taxpayers’ money,” Terrazzano said. “The carbon tax makes life in Canada more expensive, forces taxpayers to pay for more bureaucrats to administer it and now we learn we’re also paying for the government to push this failed policy on other countries.”
Records obtained by the CTF show the Trudeau government has spent $811,598 on salaries for bureaucrats, operations and maintenance, and guidance and control for the program since the 2021-22 fiscal year.
The government committed an additional $974,900 towards the creation of an independent secretariat to “support the GCPC.”
The federal government has also spent about $200 million administering the carbon tax in Canada since it was first imposed, according to separate records obtained by the CTF.
Canada’s “GDP is expected to be about $25 billion lower in 2030 due to carbon pricing than it would be otherwise,” according to the Globe and Mail.
“Trudeau should stop wasting money, stop punishing Canadians and scrap the carbon tax,” Terrazzano said.
Business
Trudeau’s new tax package gets almost everything wrong
From the Fraser Institute
Recently, Prime Minister Justin Trudeau announced several short-term initiatives related to tax policy. Most notably, the package includes a two-month GST holiday on certain items and a one-time $250 cheque that will be sent to all Canadians with incomes under $150,000.
Unfortunately, the Trudeau government’s package is a grab bag of bad ideas that will not do anything to get Canada out of the long-term growth rut in which our economy is mired. There are too many to list all in one place, but here are four of the biggest problems with Prime Minister Trudeau’s tax plan.
- It reduces the wrong taxes. When it comes to economic growth, not all taxes are created equal. Some cause far more economic harm per dollar of government revenue raised than others. The government’s package creates a holiday on the GST for some items (only for two months) which is a mistake given that the GST is one of the least economically harmful components of the tax mix. Canada’s recent growth record is abysmal, and boosting growth should be a primary goal of any changes to tax policy. A GST cut of any duration fails this test relative to other tax cuts.
- Temporary tax holidays shift consumption in time, they don’t boost growth. The government’s GST reduction is actually a short-term tax holiday on certain items that will last two months. There are decades worth of economic research showing that when governments create short-term tax breaks, they may change the timing of consumption, but they won’t contribute to actual economic growth. Shifting consumption from the future to the present won’t help get Canada out of the economic doldrums. This is particularly true of the Trudeau tax holiday since purchases that Canadians may have made after the two-month holiday period will simply be shifted forward to take advantage of the absence of the GST. As noted above, there are better taxes to cut than the GST, but no matter what taxes we are talking about permanent reductions are vastly superior to temporary tax cuts like short-term holidays.
- One-time tax rebates don’t improve economic incentives. Perhaps the worst element of the Trudeau government’s announcement was a plan to send $250 cheques to all Canadians earning under $150,000. One-time tax rebates are a terrible way to provide tax relief. When you cut income tax rates, you improve incentives for people to work and invest because they get to keep a larger share of their earnings. This helps the economy grow. One-time rebates that you get regardless of the economic choices you make has no similar effect. This means that the rebate with its $4.7 billion price tag won’t help Canada’s poor growth performance.
- It borrows from the future to give to the present. The federal government is currently running a large deficit. This raises the question of who will have to pay the $4.7 billion bill for the one-time payments announced today. The answer is that the government will have to borrow the money and therefore future taxpayers will have to either pay it off or service the extra debt indefinitely. The money the Trudeau government will send out won’t come out of thin air, it’ll have to be borrowed with the burden falling on future taxpayers.
The Trudeau government got one thing conceptually right, which is that there are advantages to reducing the tax burden on Canadians. Unfortunately, the policy package it has put forward to provide tax relief gets everything wrong. It reduces the wrong taxes, shifts taxes temporally rather than cutting them, does nothing to improve economic incentives, and burdens future taxpayers. With the holiday season around the corner, this attempt at a gift to Canadian taxpayers is the economic equivalent of a lump of coal in the stocking.
Authors:
Business
Carbon tax bureaucracy costs taxpayers $800 million
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.
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