Financial considerations have impacted the travel plans of about a third of Canadians this year, according to a Leger
poll released in July. But if the goal of the tax is to put a price on carbon and discourage the use of fossil fuels, policy-makers behind the tax who remain financially secure can still keep their vacation plans, unlike less well-off Canadians.
A case in point, according to Franco Terrazzano of the Canadian Taxpayers Federation (CTF), is Prime Minister Justin Trudeau’s family vacation to British Columbia this week.
“Carbon tax is making life in Canada, including going on vacation, unaffordable,” Mr. Terrazzano told The Epoch Times. “The prime minister is going on vacation, and many Canadians can’t even afford a vacation because of what the prime minister is doing.”
Aviation and business groups have long said that domestic flights are far more expensive in Canada than in the United States due to government fees and taxes, and that adding the carbon tax could prevent Canadians from vacationing, visiting family, and operating multi-city businesses.
“If the federal government continues to roll out its carbon tax, hundreds of millions of dollars will be added to the cost of domestic air travel,” The Canadian Chamber of Commerce (CCC)
said in 2019, the year federal carbon pricing began.
Travel Out of Reach for Many
Canadians are paying about 14 cents per litre extra at the pump in federal carbon tax,
according to the CTF. And that will rise annually to reach about 37 cents by 2030.
A new
Clean Fuel Standard—called a “second carbon tax” by CTF and others—took effect July 1. It could add up to 17 cents per litre by 2030, according to an
estimate by the Parliamentary Budget Officer (PBO).
A family wanting to go only as far as a nearby lakeside cottage now have to think about the cost of fuelling their minivan, Mr. Terrazzano said. Going further afield is increasingly out of reach for many.
Without including carbon tax, Canadians already pay 27 percent of their base airfare in additional government fees and taxes, according to the CCC. By contrast, Americans pay only 11.5 percent.
Carbon tax on aviation gas is
rising along with the gas tax Canadians are paying at the pump. The carbon tax currently only applies to intra-provincial air travel, but the government is considering applying it to inter-provincial as well,
according to the transport ministry’s aviation “Climate Action Plan.”
Aviation gas is exempt from carbon tax in the territories, which rely more on air transportation.
Federal carbon pricing
applies to all provinces and territories except British Columbia, Quebec, and the Northwest Territories, which have provincial carbon pricing policies that meet the federal stringency benchmark.
Carbon pricing is meant to “reduce greenhouse gas emissions while also driving innovation,” the federal government
says. “It is encouraging industries to become more efficient and use cleaner technologies, and it is spurring new and innovative approaches for cutting pollution, using energy differently, and saving money.”
About 45 percent of Canadians think the carbon tax is ineffective in reducing fuel consumption, and 53 percent think it is ineffective at combating climate change,
according to a Nanos Research poll commissioned by CTV News and released Aug. 6.
The poll also found that 67 percent think it’s poor or “very poor” timing to increase the carbon tax.
The government issues rebates, called the Climate Action Initiative payment, meant to make up for the increased cost of living due to the carbon tax. But the PBO
has said that most Canadians are still at a significant net loss.
Net Loss After Rebates
The net loss is greatest in Alberta, where the average household loses $710 annually, rising to more than $2,700 by 2030. So although Albertans may see a rebate of more than $1,700 on average, they’re paying more than that throughout the course of the year.
For Ontario, the net loss for the average household is $478 annually.
The lowest two income “quintiles” (five equal groups the population is divided into by income level) still see a net gain from the rebate. Families in the lowest quintile have a
median after-tax income of about $20,000 annually. Those in the second lowest earn about $40,000 annually. In Alberta, the lowest quintile would gain $440 from the rebate, and in Ontario, $241.
The highest cost is to the fifth, the highest quintile, which has a median after-tax family income of a little over $140,000,
according to Statistics Canada. Albertans in this quintile will lose almost $3,000 annually.
Following the PBO’s report published in March indicating that Canadians will pay more, Environment and Climate Change Minister Steven Guilbeault acknowledged that “if you do the average,” the scheme “is going to cost more money to people,” but he said it’s the rich who are paying more.
“The people who are paying are the richest among us, which is exactly how the system was designed,” Mr. Guilbeault
said in an interview on CTV’s Question Period that aired April 2.
The idea of
wealth redistribution was also raised recently by the new national revenue minister. In a comment to local newspaper Le Progrès de Coaticook in her riding, Minister Marie-Claude Bibeau said her nickname for her department is “the department of wealth redistribution.”
