Government data shows carbon tax to impact GDP by $25 billion in 2030

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OTTAWA — The federal carbon tax will have a negative economic impact on Canada’s real gross domestic product (GDP) of $25 billion, or approximately one per cent, in 2030 according to the government’s own internal data it released on Thursday.

Those numbers, which were shared with the Parliamentary Budget Officer (PBO) last month on the condition they remain confidential, were published as Conservative Leader Pierre Poilievre was about to deliver a speech to call on the government to disclose them publicly.

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The government had previously said it could not release the data because it could contain sensitive information.

“Because of our relentless questioning and the pressure that is weighing heavily on Liberal MPs, the government has finally relented and released part of the information. It had to be pulled out like a rotten tooth, and rotten it is,” said Poilievre in the House of Commons.

Environment and Climate Change Canada (ECCC) estimates that the real, or inflation-adjusted, GDP in a scenario without a carbon tax in 2030 would be $2,688 billion. With a carbon tax, that number drops to $2,663, which is a difference of $25 billion.

That amounts to a 0.92 per cent reduction in real GDP in 2030. It is slightly lower than the PBO’s estimation of 1.3 per cent which it predicted in its first economic analysis in 2022.

ECCC’s numbers also show that the carbon tax is bringing the country’s emissions down.

Environment Minister Steven Guilbeault said that, put together, the fuel charge and the industrial carbon tax will account for nearly 80 million tonnes of greenhouse gas emissions in 2030 — which represents about a third of projected total emissions.

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He also attempted to downplay his department’s internal data, saying that it should not be interpreted as a comprehensive economic overview of the impacts of the carbon tax. He said the department was simply providing data requested by the PBO for its own analysis.

“A full economic assessment of carbon pricing cannot be done without considering the benefits of reducing pollution and the cost of not taking action, something unfortunately the Conservative Party continues to ignore,” said Guilbeault.

“Canadians are already feeling the cost of climate change through losses to communities and livelihoods from wildfires, floods and hurricanes.”

The Liberals had been under pressure to release ECCC’s internal numbers on carbon pricing ever since PBO Yves Giroux told MPs in a committee meeting that he and his staff had seen them but “we’ve been told explicitly not to disclose it and reference it.”

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He said those numbers essentially confirmed his office’s conclusion that the carbon tax would negatively affect the Canadian economy.

When asked by Conservative MP Marty Morantz if the government “put a gag” on the PBO to not talk about the government’s own data, Giroux said it was his “understanding.” The Conservatives went on to say that the Liberals put a “gag order” on the PBO.

The PBO posted on its website the letter it received from Environment Deputy Minister Jean-François Tremblay on May 14. Attached to the letter was the impact of the carbon tax on GDP and its economic impacts in each province and territory from 2022 to 2030.

“The data the Department is providing contains unpublished information. As such, I request you to ensure that this information is used for your office’s internal purposes only and is not published or further distributed,” reads the letter.

Guilbeault said at the time that the insinuation that the government was gagging the PBO is “outrageous” and that there were no “secret documents” but said that the data can sometimes contain sensitive information which is why is it cannot be shared at large.

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On Thursday, Guilbeault denied that the timing of the data being released had anything to do with Poilievre forcing a debate in the House on the subject.

“Some of the data had never been published before, so we needed to make sure that we were not in violation of any privacy law, and we made those verifications. As soon as we were able, we tabled the information in the House of Commons,” he told reporters.

The PBO is expected to table an update to its 2022 and 2023 reports of the fiscal and economic impacts of the federal carbon tax after a modelling error included not only the consumer carbon tax but also the industrial carbon tax.

Giroux has already said that he does not expect the conclusions to be vastly different from its previous reports.

National Post
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