Monday , January 25 2021

What you need to know: A federal carbon tax comes into force in Ont., Manitoba, Sask. and N.B. today



The federal Liberal government will begin to raise its carbon tax on fuels that emit greenhouse gases today in the four provinces that have refused to participate in the climate framework across Canada.

The tax or levy has been designed to reduce the country's carbon emissions so that Canada can meet the reduction targets it agreed at the Paris climate summit.

In Ontario, Manitoba, New Brunswick and Saskatchewan, where conservative governments have strongly opposed any kind of carbon pricing scheme, Ottawa will use its carbon tax on fossil fuels – starting this year at $ 20 per cent. tonnes of greenhouse gas emissions. In the provinces already have other carbon pricing measures, such as Alberta, B.C. and Quebec, nothing changes, as they have models that Ottawa have considered acceptable.

The four provincial governments opposed Prime Minister Justin Trudeau's plan – along with the federal Conservative party – fearing that it would be economically damaging and far too punitive for consumers and small businesses.

Supporters of the Liberal scheme say the threat of climate change is calling for action and a plan of this revenue-neutral type is the best way to move consumption patterns away from fossil fuels. emit greenhouse gases.

How much does this whole cost cost me?

Based on federal figures, the tax in the four non-compliant provinces will lead to an approximate cost increase of 4.42 cents liters for gasoline, 5.37 cents for light fuel oil (home heating fuel), 3.91 cents per cubic meter. for natural gas and 3.10 cents per liter for propane.

Based on those figures, and according to calculations by CBS News, the average home of Ontario will pay around $ 10 more per month for natural gas (based on an average of 252 m3 of consumption) from April 1.

The figure will be significantly lower in summer but possibly much higher in winter, when natural gas is used for home heating spikes. The average home of Ontario, for example, uses about 419 m3 of natural gas in January but only 51 m3 in July, according to data supplied to CBS News by the Ontario Energy Board regulator.

The cost of filling a vacant residential oil tank, common in places such as New Brunswick countryside and varying in size, will increase by around $ 48 for a 910 liter model.

The cost of fully replenished Civic Honda (based on a 47-liter tank) will increase by about $ 2, while full filling for Ford Explorer SUV will cost around $ 3 more.

These costs are expected to rise each year as the carbon tax increases by $ 10 / ttons until it reached $ 50 in 2022 – meaning that those costs will more than double in less than three years.

Users will not pay the tax directly to the federal government; instead, Ottawa will set the tax on fuel companies and produce and distribute, which in turn will transfer those costs to customers.

The three northern territories are charged at a carbon price starting on July 1, 2019.

How much will I get as a carbon refund?

To compensate for the rise in living costs, the federal government has pledged to return every dollar that it collects in carbon tax to people in the province where it was collected – an effort to make household budgets in Wales. on the money they will be shellfish as part of this carbon reduction scheme.

In fact, some Canadian people are already on the verge of receiving the 'Climate Action Motivation Payment', or a refund. It is paid to eligible taxpayers who claim it on their 2018 tax return with the Canadian Revenue Agency.

Ottawa has said that future payments will be made annually and will take into account the value of a year of emissions.

This is what the average home (defined by Ottawa as 2.6 people) will receive from the federal government: t

  • In Ontario: about $ 300 a year.
  • In New Brunswick: $ 248.
  • In Manitoba: $ 336.
  • In Saskatchewan: $ 598.

If a taxpayer is entitled to a tax refund, that rebate would be promoted by the amount each household is entitled to under the new climate incentive payment program. If you owe federal government money at tax time, that amount would be reduced by the amount you can earn from this initiative. Only one refund or tax relief per household.

The Liberals say that on average households will come forward in their plan to raise carbon tax and provide direct refunds to consumers in the provinces and territories that do not have a carbon valuation scheme. The Conservatives say it will make everything more expensive, while the NDP and the Greens say it won't reach Canada to its emissions targets. (CBS News) t

The amount will vary based on the province and the number of people in household. The payment is not a means tested benefit and does not depend on income levels.

For example, one adult in Ontario would see about $ 154 next year from the payment.

Is the carbon tax revenue neutral?

While the federal government has insisted that the carbon tax will be neutral in terms of revenue for the federal government, a government official acknowledged speaking at a technical briefing to journalists that some Canadians – about 30 percent of them – will pay. more carbon taxes a year they can benefit from the new repayment program.

The officer said that these people were more likely to be wealthier Canadians who had to heat larger homes or own larger vehicles.

The government says the other 70 per cent of Canadians will receive more in climate repayment payments than they pay each year through the new carbon tax.

Why do the federal Liberals do this?

Canada joined ambitious targets for emission reduction at a meeting that coincided with the Paris climate in 2015. Ottawa considers a national pricing strategy as the best way to live accordingly.

The Liberal government set the same targets set by the former Conservative government: 17 per cent below 2005 levels by 2020 and 30 per cent lower by 2030.

The government is projects that the pricing scheme will reduce carbon pollution by 50 million to 60 million tonnes by 2022 – equivalent to taking 12 million cars off the road, or closing 14 coal works.

But the federal government has surrendered a carbon price alone that will not be enough to meet Paris targets.

The national climate plan also includes other measures to combat climate change, including new building codes to promote energy efficiency, charging electric cars, expanding clean electricity sources and upgrading. power grids.

Has carbon tax ever worked from the front?

In 2008, B.C. the implementation of North America's first broad carbon tax. The province has seen some success with its carbon neutral plan: it reduced income taxes to compensate for an increase in consumption rates on fossil fuels – the two lowest personal income tax rates were reduced, families had t Low tax credit income and the corporate body reduced the tax rate.

And according to B.C. Government figures, the province's actual GDP grew by more than 17 per cent, while net emissions fell by 4.7 per cent, between 2007 and 2015.


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