How Much Will the Federal Carbon Tax Cost Ontarians?

Coal-Fired Plants in China
As highlighted by Greg Rickford, Ontario Minister of Energy, Northern Development and Mines, the federal carbon tax that began to apply in Ontario on April 1, 2019, is expected to increase the cost of living and doing business in Ontario, perhaps most notably as it relates to gasoline prices and natural gas.  Some have also (and rightly so) criticized the imposition of HST on top of the federal carbon tax, an illegal sharp practice that amounts to a tax on a tax, i.e. double taxation.  As a mild response to address these concerns, the government of Ontario under Doug Ford plans to introduce a series of "transparency measures" aimed at helping people and businesses in Ontario make more calculated decisions about the new costs associated with the federal carbon tax.


Among other the things, the new transparency measures would require natural gas bills and gasoline pumps to reflect the true cost of the federal carbon tax.  With respect to natural gas bills, the government of Ontario is intent on communicating to the Ontario Energy Board (OEB) its expectations that the OEB ensure the federal carbon tax be clearly reflected on natural gas bills. With respect to gasoline, the government of Ontario expects to bring forward legislation that, if passed, would require stickers to be placed on gasoline pumps that will warn Ontario families of the hidden federal carbon tax.  It is expected that the federal carbon tax will add more than 11 cents per litre to the price of gasoline by 2022.

At the federal level, the true cost of the federal carbon tax has been at the forefront of the Conservative government's rhetoric against the liberal government's climate change action plan.  To date, the federal government has dodged questions as to just how much the carbon tax (and HST on the carbon tax) will cost Canadians. Conservative MP for Calgary Nose Hill, AB, the Honourable Michelle Rempel, also raised the equally important gender politics at play in the federal carbon tax.  Specifically, because of the daily activities that are most likely to be affected by the federal carbon tax, Michelle Rempel has argued that the federal carbon tax will have a disproportionate effect on "women" as compared to "men".

Rickford opines that the federal carbon tax "is not the only way to fight climate change and that [the] tax is as unnecessary as is unfair", the fact of the matter is that the federal carbon tax applies to Canadian provinces and territories that have, in contrast to some other Canadian provinces and territories, failed to establish a viable provincial alternative to climate change. While the previous Ontario liberal government had established a "cap-and-trade" system in Ontario, this climate action plan was repealed by the newly elected Progressive Conservative government under the leadership of Doug Ford.

Conversely, in 2014, the province of Ontario under the Dalton McGuinty liberal government became the first jurisdiction in North America to completely phase-out coal-fired electricity (one of the most important and toxic sources of Greenhouse Gas Emissions), thereby lending some support to Rickford's assertion that a federal carbon tax is not the only approach to curbing greenhouse gas emissions.  As further underscored by Rickford, Ontario families and businesses have already reduced provincial emissions by 22% from 2005, and the "Made-in-Ontario Environment Plan" clearly details how the province of Ontario will achieve an additional 8% reduction in emissions to hit its 30% emissions reduction target.



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