Modelling forecasts 12% lower emissions, $25-billion hit to Canada’s GDP by 2030
This article was written by Mia Rabson and was published in the Toronto Star on June 14, 2024.
Canada’s greenhousegas emissions will be 12 per cent lower in 2030 with carbon pricing in place than they would be if it was scrapped, new federal data published Thursday suggest.
The data also show that the pricing system for consumers and big industry in place could cause Canada’s GDP to take a $25-billion hit at the end of the decade — 0.9 per cent below what it would be without the carbon price.
Environment Minister Steven Guilbeault published the data amid accusations the government was hiding its own analysis of carbon pricing. It came out on Thursday just minutes before the Conservatives tabled a motion in the House of Commons demanding that the federal Liberals produce it.
The government has been reluctant to share the data because the numbers don’t compare the cost of carbon pricing with the cost of climate change itself. They also don’t factor in the potential for economic growth from climate investments.
Guilbeault said the data are specific to what parliamentary budget officer Yves Giroux requested to redo his analysis of carbon pricing, after admitting this spring that his original findings were flawed.
“It is important to recognize that the data published today does not represent a comprehensive economic overview of the impacts of carbon pricing,” Guilbeault said.
“Instead, it is background data related to a specific request from the PBO, which was then used to develop some of their analysis.”
For example, he said, it doesn’t contain details on the economic benefits of the $15 billion to $25 billion invested in fighting climate change every year, or the benefits to the economy of slowing the pace of that change. It also doesn’t look at the economic impact of the Canada Carbon Rebate, which this year is expected to return $11 billion to Canadian families to offset how much they pay in carbon pricing.
“Those things are not part of the analysis because the parliamentary budget officer did not ask us for (that) information,” he said.
The data became a hot topic last week after Giroux accused the government of hiding it, saying they gave it to him under orders he not disclose it.
That allegation came during a tense exchange, as Giroux was defending his office following an admission that it made a major mistake in its carbon pricing analyses, which have been a key part of the debate on whether carbon pricing is effective or too costly.
Giroux’s 2022 and 2023 reports both said while carbon rebates exceed the cost of carbon pricing for most Canadians, those benefits are largely erased when the economic impact on jobs and wages is factored in.
However, while the analyses claimed to only be looking at the impact of the consumer carbon price, they also included what is paid by big industry through a separate system.
Like Giroux’s original report, the modelling takes into account both the consumer and industrial carbon pricing systems.
Consumers, including smaller businesses and entities like hospitals, schools and universities, pay the carbon price — currently $80 per tonne — on all purchases of fossil fuels, including gasoline, natural gas and propane. Big industrial emitters, like auto factories, oilsands mines and gas power plants, pay the same price per tonne on a portion of their actual emissions.
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