Last Friday I visited my MPP, Dave Smith with only one question. “Why do you think that putting a price on carbon will not work”. We talked about a few other things during our meeting, but I came back to this question four times. His response every time was fundamentally that the Canadian program is not fair, that it costs families more than the rebate. I politely said that his information does not match mine. In reply he referenced a report from the Financial Responsibility Office as the source for his information.
So I did a bit of research.
In summary, the report he referenced exists but it does not say what he claims. I’d like to give him the benefit of the doubt, so I will send him this letter.
Dear Mr. Smith,
Thank you so much for agreeing to meet with me last Friday morning. As you may recall I really had only one question – “Why do you think that a price on carbon will not work?” You did not actually answer my question although I came back to it 4 times. Your answer every time was that according to a report issued by the Ontario Financial Responsibility Office the cost will exceed the rebate of the Canadian Federal program so it was not fair to average people to burden them with this extra cost. You said that you have people coming to your office frequently complaining that they can’t make ends meet and that it’s because of the unfair carbon tax. You referenced extra costs of $400 for a typical household and said that this number comes from a report from the Financial Accountability Office of Ontario. I questioned your source and we parted having agreed to disagree.
Well, sir, I have done my research and your opposition to the Canadian program is based on incorrect information. The Ontario FAO report dated October 2018 in Table 4.3 shows the costs to the average Ontario family in 2019 at a carbon fee of $20 per ton are $258. The Parliamentary Budget Office report of April 2019 says $260 in table 2.3 and goes on to say that that same family will receive a $307 rebate in 2019, a fact that was not published in Ontario’s FAO report.
Both reports estimate the costs up to 2022 when the carbon fee will have risen to $50 per ton. They are slightly different but are close enough to say that they fundamentally agree. The PBO report goes on to calculate the rebate for the same years. In all years the rebate exceeds cost for the average family.
The PBO goes on to say that in all years only the top 20% of income earners will pay more in carbon fees than they will receive in rebates. (See footnotes to table 2.4 ). To put this in context the average income of the top 20% is $164,117.
This pattern occurs because wealthier households tend to buy more goods that have the price of carbon embedded in them. Therefore they will tend to pay more carbon fees but will get back the same rebate as everyone else, meaning that lower income households will benefit more from the plan than the wealthier.
If there is another report that backs up your claim of unfairness, please let me know where I can find it and I will publish the information with an apology.
Otherwise when your constituents are having trouble making ends meet, stick to the truth and let them know that it is not caused by the carbon fee.
The various provincial governments who oppose the federal program are counting on the public remaining uninformed. Indeed they are mounting transparent advertising campaigns to help. Please, do your own research, talk to everyone you know and let them know the truth.
Carbon Pricing is not enough by itself to address the climate crisis, but it is an essential component, one of many.