May 23, 2018
(OTTAWA) — Elizabeth May (MP, Saanich-Gulf Islands) is questioning the conclusions of the Parliamentary Budget Officer’s report The Impact of a Pan-Canadian Carbon Pricing Levy on PBO’s GDP Projection, tabled in parliament this week.
The report projects that the impact of a carbon levy rising to $50 a tonne in 2022 will be a 0.5 percent ($10 billion) reduction in real GDP. But the model used to arrive at that figure assumes none of the provinces have carbon pricing in place.
“In reality, several provinces already have a carbon price and those provinces have experienced economic growth,” said Elizabeth May.
The PBO’s model, admittedly counter-factual, also assumes that carbon levy revenues would be recycled via the provinces and territories as lump-sum payment to taxpayers, a replica of the Green Party’s fee-and-dividend policy. However, the report fails to account for the kind of economic stimulus that could be generated by putting this money into the pockets of low-income Canadians.
“Overall, the report’s biggest failure is that it does not capture the cost of inaction on climate change,” said Ms. May. “The now disbanded National Round Table on the Environment and Economy predicted that failure to act will cost Canada billions and those costs will increase incrementally. Canada has committed to being a global leader in reducing emissions but if we don’t do our fair share, we can’t expect other countries to either. Pollution is not free and its costs should not be externalized.”