A New Study Regarding The Carbon Tax Plan

Published on October 11, 2018

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The Conservative and Liberal Parties are currently working out what is best for the Canadian population in regards to the Greenhouse Gas Pollution Pricing Act, which was put forward by the Liberal Party this year. Within this Act, Ottawa is required to return tax revenue to the province where it was raised, although Trudeau has indicated that he may be sending the money directly to households instead of to the respective provincial governments.

Dave Sawyer, an environmental economist with EnviroEconomics, has conducted research that suggests this scenario will have the biggest benefit to households, regardless of their income level. This is due to the idea that the money they would receive from the government is of a consistently larger amount than they would pay in carbon taxes. As the amount of carbon taxes rise, the amount of money that the federal government would provide to each household would too increase, more than covering these costs. For example, a household in Saskatchewan in 2022 that earns between $20-40 000 a year will have received rebates that total an excess of $1864, when weighed against their projected carbon tax.

The reason that households would receive more money back than they paid is due to the fact that carbon taxes are also earmarked to be collected from the business and industrial sector. Although some is presumed to be returned to business, Sawyer has assumed in his study that the majority is to be returned to households.