Budget watchdog troubled by spin around latest report on carbon pricing
Canada's Parliamentary budget officer said he is troubled by what he describes as the selective use of facts from his new financial analysis of carbon pricing.
Yves Giroux said the report has to be put into context alongside the costs of all other climate policies, including doing nothing.
"There will be costs no matter what we do," Giroux said in an interview with The Canadian Press.
Giroux opened a political firestorm last week with a new report which concluded carbon price rebates are worth more than the direct cost of the carbon price for 80 per cent of families. But he said when the carbon price's economic impact on job growth and incomes is factored in, 80 per cent of families in most provinces might end up with less money.
The Liberals, who campaigned successfully on carbon pricing in both 2019 and 2021, jumped on the first point to insist the strategy makes life more affordable.
The Conservatives, who have campaigned heavily on scrapping carbon pricing, latched onto the second part to insist the Liberals lied about the "sneaky carbon tax" when they said the rebates would be worth more than the cost.
Giroux said you can't pick and choose which part to discuss.
"I am concerned at times about looking at just one aspect of the report," he said.
"Looking at the big picture, the overall picture, is highly preferable. Anything we do with respect to addressing or trying to curb climate change will have costs. It's either a cost to the carbon tax or regulations to reduce the use of fossil fuel. Regulations also have a cost. Doing nothing would also have costs."
Carbon pricing is based on the idea that higher fuel costs will lead to lower usage and an overall decrease in emissions. The rebates are meant to mitigate the impact of those higher costs.
The premise may be simple, but the reality is complex and the political spin and misinformation about the policy is rampant.
Christopher Ragan, founding director at McGill University's Max Bell School of Public Policy, said the Conservatives talk about carbon pricing without offering any glimpse of what they'll do instead. Any alternative, including doing nothing, isn't free, he said.
But the government, he adds, isn't making it easy to understand what carbon pricing really does.
"I think they've been quite bad at explaining it and communicating it," he said.
The government focuses almost exclusively on the money people could save through the rebates or switching to electric cars. They're less clear that carbon pricing does have a cost to it, because that's the whole point -- to make fuel cost more.
"It's almost as if they just choose not to engage in those discussions, or they just aren't good enough to do that, and I'm not sure which it is," Ragan said.
Carbon pricing also doesn't provide instant gratification when it comes to lowering emissions.
A separate report Giroux released last year concluded that raising the carbon price to $170 per tonne by 2030, as the government intends, will eliminate 96 million tonnes of emissions more than if the price remained at the current rate of $50 a tonne.
That's about what 21 million passenger cars emit over a year, and more than 40 per cent of the emissions Canada is seeking to eliminate by 2030 to hit its reduction targets.
But the government can't yet show people that the price they're paying is having an impact.
Environment Minister Steven Guilbeault said that analysis is underway, but isn't ready yet. He was also honest in his assessment that the government's messaging about climate change and carbon pricing policies isn't always as sharp as it should be.
"I think we need to do a better job at communicating on climate change," Guilbeault said in an interview.
His department has hired some outside environment communications experts to help craft a better message with a view to launching what he described as "the largest climate change awareness campaign," likely by late spring or early summer.
That campaign will try and paint a better picture of what climate change has already cost us, what it could keep costing us and what we can do to limit those costs.
"We want to help people understand," Guilbeault said.
But the Liberals are frustrated with Giroux's report because it doesn't include the context he insists is required.
The most recent report explicitly states it "does not attempt to account for the economic and environmental costs of climate change."
Ontario Liberal MP Lloyd Longfield, who sits on the House of Commons environment committee, wrote to Giroux Wednesday to ask him to take another crack at the analysis to include those factors.
He also wants Giroux to contextualize the carbon price alongside the costs of other policies to regulate lower emissions, as well as the economic benefits of investing in low-carbon industries.
"To ignore these things does a disservice to the discussion," Longfield said in an interview.
He said critics argue the carbon price raises the cost of food, but contended climate change does too. He said the swath of droughts, wildfires and floods in California, from where Canadians get a lot of fresh produce, has raised the price of crops such as lettuce, strawberries and broccoli.
Giroux said it's up to those reading or discussing the report to put it into context.
"Our caveats are clearly included in the report and the limitations are also to the best of our capacity included, as clear as possible," he said. "So if some individuals or groups use the report and spin it a certain way, I think it's up to them to explain why."
The PBO did complete an analysis last year looking at what climate change itself is costing. It said in 2021, the GDP was 0.8 per cent lower than it would have been without climate change. In dollar figures, that amounted to between $20 billion and $25 billion less. It said the GDP will be 0.08 percentage points lower every year as a result of climate change going forward, even if the government implements every policy promised to slow it down.
Doing nothing would increase that cost.
Giroux said he didn't expand that analysis to show the cost to a family's budget because a social or cost-benefit analysis like that is tricky.
"Sometimes it can be straightforward, but sometimes it can be difficult and it's typically not something that we are equipped to do or for which we have an explicit mandate," he said.
He also said the economic benefits of investing in low-carbon industries will not be realized heavily by 2030, which is as far as this report looks ahead.
Last month, Clean Energy Canada said Canada could add 700,000 new energy jobs from investing in clean technology and renewable energy, but the analysis suggests that gain wouldn't be realized until 2050.
University of Calgary economist Trevor Tombe said while regulations would dictate what one must do to cut back on fossil fuel use, carbon prices leave it to a consumer or a business to decide what works best for them. That makes it the most efficient way, and usually the cheaper way, to address carbon emissions, he said.
The cost of regulation is also much less transparent than the cost of the carbon price.
This report by The Canadian Press was first published April 8, 2023.
IN DEPTH
Jagmeet Singh pulls NDP out of deal with Trudeau Liberals, takes aim at Poilievre Conservatives
NDP Leader Jagmeet Singh has pulled his party out of the supply-and-confidence agreement that had been helping keep Prime Minister Justin Trudeau's minority Liberals in power.
'Not the result we wanted': Trudeau responds after surprise Conservative byelection win in Liberal stronghold
Conservative candidate Don Stewart winning the closely-watched Toronto-St. Paul's federal byelection, and delivering a stunning upset to Justin Trudeau's candidate Leslie Church in the long-time Liberal riding, has sent political shockwaves through both parties.
'We will go with the majority': Liberals slammed by opposition over proposal to delay next election
The federal Liberal government learned Friday it might have to retreat on a proposal within its electoral reform legislation to delay the next vote by one week, after all opposition parties came out to say they can't support it.
Budget 2024 prioritizes housing while taxing highest earners, deficit projected at $39.8B
In an effort to level the playing field for young people, in the 2024 federal budget, the government is targeting Canada's highest earners with new taxes in order to help offset billions in new spending to enhance the country's housing supply and social supports.
'One of the greatest': Former prime minister Brian Mulroney commemorated at state funeral
Prominent Canadians, political leaders, and family members remembered former prime minister and Progressive Conservative titan Brian Mulroney as an ambitious and compassionate nation-builder at his state funeral on Saturday.
Opinion
opinion Don Martin: Gusher of Liberal spending won't put out the fire in this dumpster
A Hail Mary rehash of the greatest hits from the Trudeau government’s three-week travelling pony-show, the 2024 federal budget takes aim at reversing the party’s popularity plunge in the under-40 set, writes political columnist Don Martin. But will it work before the next election?
opinion Don Martin: The doctor Trudeau dumped has a prescription for better health care
Political columnist Don Martin sat down with former federal health minister Jane Philpott, who's on a crusade to help fix Canada's broken health care system, and who declined to take any shots at the prime minister who dumped her from caucus.
opinion Don Martin: Trudeau's seeking shelter from the housing storm he helped create
While Justin Trudeau's recent housing announcements are generally drawing praise from experts, political columnist Don Martin argues there shouldn’t be any standing ovations for a prime minister who helped caused the problem in the first place.
opinion Don Martin: Poilievre has the field to himself as he races across the country to big crowds
It came to pass on Thursday evening that the confidentially predictable failure of the Official Opposition non-confidence motion went down with 204 Liberal, BQ and NDP nays to 116 Conservative yeas. But forcing Canada into a federal election campaign was never the point.
opinion Don Martin: How a beer break may have doomed the carbon tax hike
When the Liberal government chopped a planned beer excise tax hike to two per cent from 4.5 per cent and froze future increases until after the next election, says political columnist Don Martin, it almost guaranteed a similar carbon tax move in the offing.
CTVNews.ca ÐÇ¿Õ´«Ã½
BREAKING Israeli military says it has carried out a 'targeted strike' in Beirut
The Israeli military targeted a top Hezbollah figure in a strike on Beirut's southern suburbs on Friday, two security sources in Lebanon said, sharply escalating the year-long conflict between Israel and the Iran-backed group.
DEVELOPING Here's what we know about Israel's latest strike in Beirut
Smoke is rising over Lebanon’s capital of Beirut Friday after Israel’s military struck southern suburbs – a dramatic escalation in a year-long period of conflict between Israel and Hezbollah.
Since she was a young girl growing up in Vancouver, Ginny Lam says her mom Yat Hei Law made it very clear she favoured her son William, because he was her male heir.
The province's public security minister said he was "shocked" Thursday amid reports that a body believed to be that of a 14-year-old boy was found this week near a Hells Angels hideout near Quebec City.
An Ontario man says it is 'unfair' to pay a $1,500 insurance surcharge because his four-year-old SUV is at a higher risk of being stolen.
BREAKING
Emergency crews in northern Ontario found the bodies of four people inside a home where a fire broke out Thursday night.
Cognitive decline reduced by MIND diet, especially for women and Black people, study finds
Following the MIND diet for 10 years produced a small but significant decrease in the risk of developing thinking, concentration and memory problems, a new study found.
The Montreal couple from Mexico and their three children facing deportation have received a temporary residence permit.
20-year-old, co-conspirator charged in $230M cryptocurrency theft following FBI raid of Miami mansion
A 20-year-old man and his co-conspirator have been charged with conspiracy to steal and launder over US$230 million in cryptocurrency, and federal authorities said the arrests are connected to an FBI raid of a mansion in Miami.
Local Spotlight
They say a dog is a man’s best friend. In the case of Darren Cropper, from Bonfield, Ont., his three-year-old Siberian husky and golden retriever mix named Bear literally saved his life.
A growing group of brides and wedding photographers from across the province say they have been taken for tens of thousands of dollars by a Barrie, Ont. wedding photographer.
Paleontologists from the Royal B.C. Museum have uncovered "a trove of extraordinary fossils" high in the mountains of northern B.C., the museum announced Thursday.
The search for a missing ancient 28-year-old chocolate donkey ended with a tragic discovery Wednesday.
The Royal Canadian Mounted Police is celebrating an important milestone in the organization's history: 50 years since the first women joined the force.
It's been a whirlwind of joyful events for a northern Ontario couple who just welcomed a baby into their family and won the $70 million Lotto Max jackpot last month.
A Good Samaritan in New Brunswick has replaced a man's stolen bottle cart so he can continue to collect cans and bottles in his Moncton neighbourhood.
David Krumholtz, known for roles like Bernard the Elf in The Santa Clause and physicist Isidor Rabi in Oppenheimer, has spent the latter part of his summer filming horror flick Altar in Winnipeg. He says Winnipeg is the most movie-savvy town he's ever been in.
Edmontonians can count themselves lucky to ever see one tiger salamander, let alone the thousands one local woman says recently descended on her childhood home.