Budget Watchdog Says Feds Hiding Analysis of Carbon Tax Economic Impact

The federal budget watchdog says Ottawa is withholding its analysis of the economic impacts of the carbon tax.
“We’ve seen that, staff in my office, but we’ve been told explicitly not to disclose it and reference it,” Parliamentary Budget Officer (PBO) Yves Giroux told the House of Commons finance committee June 3.
Mr. Giroux told MPs the analysis “essentially” confirms the report that his office has published. The PBO has assessed that when the economic impacts of the carbon tax are factored in, eight out of 10 households are worse off financially.
“So that’s why I’m comfortable with what we have already published, with the understanding that it provides the impact of the carbon tax and the OBPS [output-based pricing system],” he said.
The PBO came under fire last week with the federal government honing in on an error the office made in its analysis of the fuel charge, or carbon tax. Instead of solely using fuel charge data, the PBO also included the OBPS, which is the industrial pricing system for large emitters.
The government has said that the inclusion of this data has skewed the results and overestimated the impacts of the carbon tax on households.
Liberal MP Ryan Turnbull wrote a letter to the PBO May 28 on the issue, requesting a new analysis be produced. The PBO had announced the error in mid-April and said at the time a new report was being worked on.
Mr. Turnbull challenged Mr. Giroux on that issue during the committee meeting, saying it could be a faulty assumption.
“How could you prejudice the findings of a future report that you haven’t run the analysis on?” he asked.
Mr. Giroux said it’s based on his office’s “best judgement” and discussions with stakeholders such as Environment and Climate Change Canada (ECCC). He also noted the government has its own analysis on the economic impacts of carbon pricing which it has not published.
“They provided us with their estimates, real GDP on labour income, on capital income, and they indicated on the response form that these were confidential and that we could not disclose it,” he said. The committee requested the response from ECCC.
The carbon tax has become a major political issue, with the Conservatives promising to “axe the tax” and dedicating many efforts against it.
MPs are voting on yet another Tory motion June 3 in relation to the carbon tax, this time calling for a “summer tax break” until Labour Day. The motion also calls to pause the GST on gasoline and diesel.
Mr. Turnbull raised the politicization of the issue in committee, telling Mr. Giroux “Conservatives are out there making claims based on your report that I think may turn out to be false.”
“Wouldn’t you think that they should be proceeding with caution given the fact that there’s an error in your report? That’s pretty significant,” he said.
Mr. Giroux replied that the government has also used PBO reports.
Prime Minister Justin Trudeau defended the carbon tax using PBO figures in the House of Commons on May 22, saying its report “found eight out of 10 Canadian families in jurisdictions where the carbon price applies do better with the Canada Carbon Rebate that comes in four times a year.”
The PBO also said that eight out 10 households are worse off when the economic impacts of the tax are factored-in, which is the information the Conservatives have been using.
This ratio could change as the PBO conducts its new analysis, with a final product expected this fall.