Carbon tax increases will cost workers income, jobs and shrink economy: Study
· Toronto Sun
The federal government’s current plan to raise the national industrial carbon tax to $170 per tonne of greenhouse gas emissions by 2030 will cost the average Canadian worker $1,160 in lost annual income and result in 50,000 fewer jobs, according to a new study by the Fraser Institute.
The report by the fiscally conservative think tank says it would shrink the Canadian economy by 1.3% compared to a scenario in which the industrial carbon price is frozen at its current level of $95 per tonne of emissions.
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It also predicts a $170 per tonne carbon price in 2030 would have a severe negative impact on capital earnings (interest, dividends, capital gains, etc.), resulting in reduced or cancelled investment plans, and “further long-run declines in Canadian living standards.”
Canada’s current carbon price of $95 per tonne of emissions is scheduled to increase by almost 16% to $110 on April 1, on the way to $170 per tonne in 2030.
Alberta would be hardest hit
“Policymakers — and all Canadians — need to understand the significant costs further carbon price increases would impose,” said Elmira Aliakbari, director of natural resource studies at the Fraser Institute and co-author of the report, Estimated Impacts of a $170 Industrial Carbon Price in Alberta and Canada.
The study says the economic impact of a $170 per tonne carbon price by 2030 would be most severe in Alberta — where the carbon price is currently frozen at $95 per tonne — costing workers $1,730 in lost income and resulting in 10,000 fewer jobs in that province alone.
The memorandum of understanding signed by Prime Minister Mark Carney and Alberta Premier Danielle Smith in November called for an agreement by April l to raise the carbon price in that province to $130 per tonne, although reports say the two governments may miss that deadline and continue negotiating.
The current effective carbon price in Alberta is actually much lower than $95 per tonne — around $20 — because of a surplus of carbon credits large emitters can buy to comply with carbon pricing.