ANALYSIS: How April Price Increases Impact Canadians

Protesters take part in a demonstration near Hope, B.C., on April 1, 2024, to protest the federal carbon tax increase. Jeff Sandes/The Epoch Times

April has ushered in a series of price increases for Canadian taxpayers—from pay raises for government representatives to tax hikes on carbon emissions and alcohol.

A 23 percent carbon tax hike, a 2 percent alcohol tax increase, and a 4.2 percent pay raise for members of parliament means nearly a 30 percent climb in costs for Canadians overall, according to the Canadian Taxpayers Federation (CTF).

“The feds should be providing relief, not hiking taxes that make Canadians’ lives more expensive,” says CTF national director Franco Terrazzano in a press release.

Conservative leader Pierre Poilievre has also been vocal about the affordability crisis and repeatedly has called on Ottawa to “axe the tax” to ease financial pressure on Canadians. He maintains that carbon pricing increases raise the cost of all purchased goods, not just fuel.

Carbon Tax

Canadians held carbon-pricing protests across the country April 1 after the federal tax increased from $65 per tonne of greenhouse gas emissions to $80. The Liberal government’s policy is making life more unaffordable for those already struggling financially, protestors told The Epoch Times.

“I can’t afford $2,000 for an apartment, and then trying to eat, pay for your vehicle, and heat and electricity—it’s too much,” Rita Abouarrage said while at a protest on Parliament Hill in Ottawa.

Prime Minister Justin Trudeau has said the tax hike will be accompanied by an increase in the Canada Carbon Rebate to put “more money back in the pockets of eight out of 10 Canadian families.”

But that assertion has been refuted by the Parliamentary Budget Officer, who estimates the carbon tax will cost the average Canadian household as much as $911 more this year than they receive in rebates.

Fraser Institute senior fellow Kenneth Green described the carbon tax system as being “beyond redemption” in a recent essay.

“The lessons from Canada and beyond are clear—carbon taxes may work in theory, but no government has successfully implemented a properly designed carbon tax,” Mr. Green said.

He says Ottawa should eliminate the carbon tax because real-world examples have proven that governments in both Canada and Europe have failed to implement “sound, well-designed” pricing systems.

Most of these systems are not revenue neutral and are not implemented consistently among industries, he said, adding that layering the tax on top of other costly regulations, nullifies any potential benefit of the tax.

“The federal tax should be abandoned as an idea that is good as an abstract theory, but not in practice,” he wrote.

Six Canadian premiers subscribe to the idea of getting rid of the tax for good. Conservative premiers in Alberta, New Brunswick, and Nova Scotia, Ontario, and Saskatchewan have all said they would like to see the tax scrapped. Newfoundland and Labrador Liberal Premier Andrew Furey requested a pause to the April 1 hike, saying residents can’t afford to rise in costs the tax hike will bring.

Now that the price increase has gone ahead, he has asked Mr. Trudeau for an “emergency meeting of leaders.”

That request has been echoed by Mr. Poilievre. The Tory leader penned an open letter to the prime minister asking him to meet with provincial and territorial leaders within the next six weeks to address the “carbon tax crisis.”

“Included in these discussions should be your willingness to allow the provinces to opt out of the federal carbon tax and pursue other responsible ideas for lowering emissions without taxes,” Mr. Poilievre wrote in the April 2 letter posted on social media.

The federal carbon tax is applied across the country except in British Columbia, Quebec, and the Northwest Territories where they collect their own fuel tax.

Canada’s carbon tax is the price placed on the carbon content of fuels to reduce CO2 emissions. It kicked off in 2019 at $20 per tonne and is set to rise $15 per tonne every year until it eventually reaches $170 per tonne in 2030.

Ottawa has described the carbon tax as a necessity to achieve net-zero carbon emissions by 2050.

Alcohol Tax

The federal government implemented its annual alcohol excise tax increase on beer, spirits and wine April 1.

Rather than the planned 4.7 percent alcohol tax hike, however, Finance Minister Chrystia Freeland said Ottawa would cap the increase at two percent through 2026. The cap was implemented to support small brewers, she said.

“In recent years, we’ve seen that the cost of key ingredients for beer ... are rising due to the impact of global inflation, and that’s been a real challenge for brewers in Canada,” she said during a press conference last month. “Our government really recognizes the value, particularly of small businesses ... and we also recognize the affordability challenges, so that’s why we’ve taken this decision.”

The government decision comes after repeated calls to scrap the increase altogether.

Tory MP Tracy Gray called on the Liberals in a Feb. 9 social media post to halt the tax hike, saying the planned tax would take millions out of the Canadians’ pockets in 2024–25.

Beer Canada also criticized the increase, saying the government’s tax policies should take “into account current economic conditions.”

The CTF estimates this year’s federal alcohol tax increase will cost taxpayers roughly $40 million.

Mr. Poilievre has criticized the tax increase saying the prime minister is continually raising taxes.

“It’s enough to drive a man to drink, but he wants to tax that, too,” Mr. Poilievre said in the House of Commons in February.

The tax, which is known as an “escalator tax,” is automatically increased at set intervals with no debate or vote in Parliament prior to the scheduled increases. Before the tax was automated, it previously had to be approved in the House of Commons before it increased.

MP Pay Raise

Meanwhile, members of parliament received a 4.2 percent pay hike for April 1 that will see salaries increase by between $8,500 to $17,000 annually.

The pay hike will push backbench MP annual salaries up to $203,100 from the current rate of $194,600. Cabinet ministers will collect $299,900 up from $287,400, while Prime Minister Justin Trudeau would take home $406,200 compared to the previous annual rate of $389,200.

MPs are traditionally given pay raises on April 1 each year. The amount is based on the average annual increase in union contracts with corporations that have more than 500 employees.

The average annual salary among all full-time workers in Canada is $67,000, according to Statistics Canada.

The Epoch Times contacted the Office of the Prime Minister for comment but did not hear back by press time.