The federal government has released its estimate of the impact of carbon pricing on the size of the economy after it was accused by the opposition Conservatives of muzzling an officer of Parliament.
The modelling, created by Environment and Climate Change Canada (ECCC) for the Parliamentary Budget Office (PBO) in May and released today, projects carbon pricing’s impacts on emissions and the gross domestic product (GDP).
The department’s modellers took the rising price on carbon and imposed it on Statistics Canada’s GDP figures. According to the data, Canada’s emissions would be nearly 11 per cent higher by 2030 without carbon pricing.
The modelling says that amounts to nearly 80 million tonnes (Mt) of greenhouse gas emissions eliminated by carbon pricing.
The data also shows that carbon pricing is expected to reduce national GDP.
The government’s release comes as the Conservatives introduced an opposition motion Thursday that would compel the government to provide a copy of its economic analysis on the impact of the federal fuel charge and the output-based pricing system.
Conservative Leader Pierre Poilievre spoke to the motion in the House of Commons on Thursday, taking credit for the disclosure.
“Because of our relentless questioning, and the pressure that is weighing heavily on Liberal MPs, the government has finally relented and released part of the information. It had to be pulled out like a rotten tooth,” he said.
Speaking in the House of Commons, Conservative leader Pierre Poilievre says the opposition’s “relentless questioning” led the Liberal government to release its data on the impact of carbon pricing.
In response, Liberal MP and Deputy House Leader Mark Gerretsen suggested that Poilievre had been caught by surprise by the data disclosure and knocked off-message.
“The Conservative leader brought in a motion into this House today and then barely even spoke to it, because he got the data moments ago,” said Gerretsen. “The data didn’t fit his narrative.”
GDP would be higher without carbon pricing, numbers show
According to ECCC’s figures, Canada’s GDP would be about $2.68 trillion in 2030 without carbon pricing. With carbon pricing, it’s expected to hit $2.66 trillion in 2030.
The data reflects previous analysis which showed that both GDP and emissions would be higher without carbon pricing. The data models the impact of the patchwork of federal and provincial/territorial carbon pricing systems and includes both industrial carbon pricing and the consumer version, widely known as the carbon tax.
A senior federal government source, who was not authorized to speak publicly, told CBC News the data does not approach what the government would consider “a robust economic analysis.”
The source also said it does not change the government’s view that eight out of 10 Canadians receive more back in quarterly carbon tax rebates than they pay through federal fuel charge.
The source also said there’s a risk of misinterpreting the data since it does not model the cost of doing nothing at all to address climate change, the effect of the rebates or other proceeds returned to households or businesses, or the new jobs that could result from greening the economy.
Steven Guilbeault, environment minister, explains that the numbers he provided on the carbon pricing is what the parliamentary budget officer asked of his ministry.
The Canadian Climate Institute estimates that by 2030, the changing climate and extreme weather events could cost the Canadian economy $35 billion. The federal government estimates that between $15 and $25 billion in government and private investments are made each year to cut greenhouse gas emissions economy-wide.
ECCC released the modelling Thursday after Parliamentary Budget Officer Yves Giroux told MPs that the government has numbers on the economic impact of carbon pricing it had not published.
“We’ve seen that — staff in my office — but we’ve been told explicitly not to disclose it and reference it,” Giroux told the House of Commons finance committee on June 3.
Conservatives subsequently accused the government of putting a “gag order” on Giroux.
“Last week, the Parliamentary Budget Officer revealed that the government is hiding a secret carbon tax report that proves a majority of Canadians pay more into this scam than what they get back in these phony rebates,” said Conservative finance critic Jasraj Singh Hallan in the House of Commons on Monday.
“The Liberal-NDP government did what it does best. It put a gag order on the PBO, keeping the truth from Canadians.”
“Conservatives, unfortunately, are misleading Canadians yet again,” Environment Minister Steven Guilbeault replied. “Our government has and will continue to support the Parliamentary Budget Officer to fulfil his role and his office.”
Minister of Environment and Climate Change Steven Guilbeault tells Power & Politics that the recent error by the parliamentary budget officer is ‘below the standard’ he expects from the PBO. The Parliamentary Budget Office issued an update to its analysis of federal carbon pricing, saying it had mistakenly included the industrial price on carbon.
In May, the debate over carbon pricing took another turn when Giroux quietly disclosed his analysis of the fiscal and economic impact of the federal fuel charge, which turned out to contain what he called an “inadvertent error.”
The PBO’s calculations in that analysis included both the impact of the consumer carbon price and industrial carbon pricing.
The PBO said it is committed to updating the analysis by the fall. According to a letter posted on the PBO’s website, the office requested that Environment Canada provide the data in April.
In a letter sent in May, Environment Canada shared an Excel spreadsheet with a caveat.
“The data the Department is providing contains unpublished information,” says the letter from Jean-François Tremblay, Environment Canada deputy minister. “As such, I request you to ensure that this information is used for your office’s internal purposes only and is not published or further distributed.”
CBC filed an access to information request for the unpublished data. Guilbeault’s department proactively disclosed the data to CBC and other journalists and posted it online today.
CBC’s access to information request has not yet been fulfilled.