Think the carbon tax is gone? Think again.
Prime Minister Mark Carney pulled a fast one on Canadians. He scrapped the consumer carbon tax last year but left in place a hidden carbon tax that is driving up the price of gasoline.
Carney recognized when he was running for Liberal leader just how unpopular the so-called consumer carbon tax had become. Thanks to opposition advocacy, millions of Canadians knew it was costing them 17.6 cents per litre at the pumps and didn’t buy the Trudeau government’s spin that government rebates were somehow leaving them better off.
So Carney, despite his net zero background and his longstanding support for the consumer carbon tax as former prime minister Justin Trudeau’s economic advisor, scrapped what was perhaps the most politically unpopular policy of the Trudeau era.
Instead, he’s relying on more insidious taxes to accomplish his climate change goals. Of course, there’s the industrial carbon tax, which Carney insists only big businesses will have to pay (which no one should believe), but there’s also the so-called “clean fuel standard,” which is costing Canadians at the pumps big time.
The Canadian Taxpayers Federation (CTF) recently highlighted analysis from the Parliamentary Budget Officer (PBO), which shows the clean fuel standard is costing Canadians up to seven cents per litre every time they fill up at the pump.
For a single mom filling up her minivan on her way to hockey practice, that’s $4.20. And if that mom fills up her van once a week, that’s $218.40 a year.
But it gets worse.
The clean fuel standard, which the Canadian Taxpayers Federation calls the “hidden carbon tax,” will ramp up to 17 cents per litre once the regulations are fully implemented just four years from now, in 2030.
That’s almost exactly as much as the cost of the consumer carbon tax when it was scrapped last year ahead of the 2025 federal election.
By 2030, the clean fuel standard will cost the average household between $384 and $1,157, depending on the province in which Canadians live.
And it will cost the overall economy $9 billion a year, according to government records.
That’s a far cry from scrapping the carbon tax on Canadians, as Carney promised to do.
Clearly, businesses don’t just pay carbon taxes. They pass them on to consumers. This is true of the clean fuel standard, just as it is true of industrial carbon taxes, which are scheduled to rise in the years ahead.
With the CTF’s reporting of the PBO’s analysis, Carney’s intentions are clear. He had no intention of ever getting rid of the carbon tax burden facing Canadian families.
Instead, Carney’s plan is to hide carbon taxes, so that Canadians aren’t paying them directly. But indirectly, the costs of carbon taxes will keep rising year after year under Carney’s plan.
And by 2030, between the cost of the clean fuel standard and industrial carbon taxes, the carbon tax burden on Canadians will be higher than it ever was under the Trudeau regime.
The only difference is that under Carney’s scheme, it’s much harder for Canadians to figure out exactly how much of a burden Carney’s carbon tax regime is.
And that’s completely by design.
So, the next time you see Carney on the news touting the fact that he scrapped the consumer carbon tax to help make your life more affordable, don’t believe the spin. Remember, Carney’s hidden carbon taxes are costing consumers, even if they’re hidden ones. And this time, there’s no rebates.
Jay Goldberg is the Canadian Affairs Manager at the Consumer Choice Center. He previously served as the Ontario Director at the Canadian Taxpayers Federation and a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
