The cuts and promises of the carbon tax and its impact on Canadians

Canada's consumer carbon tax remains a major election issue for numerous residents who hope to see savings now that it's been dropped. Kathy Le reports.

The shelves are lined with traditional Italian staples at Gordon Fontaine’s kiosk at a farmer’s market in Calgary, Alta.

“Primarily, we focus on olive oil and balsamic vinegar as well as pasta production,” said Fontaine, owner of Soffrito.

His business is a labour of passion for good ingredients and a homage to his roots. Being in business for 15 years, Fontaine said there have been ups and downs, and the consumer carbon tax has made things challenging.

“It’s affecting our bottom line for sure,” said Fontaine.

“We’re cooking with gas, we’re using gas to deliver all our products.”

The federal election looked to be one focused on the carbon tax with the Conservatives promising to axe it.

But it seems there has been a shift after Mark Carney, in his first act as prime minister, signed a directive to cut the consumer cost of carbon to zero as of April 1st, while upholding the industrial carbon tax.

People like Fontaine are happy to hear about the decision.

“I would be excited to, you know, see $100 a week in savings so that I can invest more into inventory,” he said.

Dan McTeague, president of Canadians for Affordable Energy, says the average price decrease at the pumps for most of Canada will be about 19 cents a litre, however, that won’t last long.

“Two weeks from April 1st, we have a switch over from winter to summer gasoline that will see a net increase of about 6 cents a litre,” said McTeague.

“So that 18 to 20 cents now becomes about a 14-cent advantage. And then we see summer demand usually going up or hurricanes throughout the summer, so we may not get quite a big a deal, but the drop is still a noticeable one.”

Political gap on the industrial carbon tax

While the Liberals and Conservatives are on the same playing field for the consumer carbon tax, there remains a political gap on the industrial carbon tax.

Blake Shaffer, an associate professor of economics at the University of Calgary, says the latter tax is aimed at large emitters.

“These would be facilities like oil sand facilities, electric generators and factories that produce things that emit a large amount, so above a threshold. And that’s covered by this large emitter pricing, which is, I’d say, largely flown under the radar of everyday Canadians,” said Shaffer.

The Liberals want to keep the industrial carbon tax and the Conservatives want to scrap it and instead expand clean technology tax credits.

Mark Zacharias, executive director at Clean Energy Canada, says the carbon tax on big emitting companies makes Canada more competitive if we are to diversify the country’s exports.

“If we look at jurisdictions like the European Union, so next year, if you don’t have a carbon price on the goods you’re trying to import into the EU, you’re going to have to pay it anyways,” said Zacharias.

“So from a competitiveness standpoint, it makes perfect sense.”

Prince Edward Island, Nunavut, Manitoba and the Yukon are the only provinces and territories in the country that use the federal industrial carbon backstop. The rest operate carbon pricing provincially.

Shaffer says removing the federal policy wouldn’t necessarily mean the industrial carbon tax would go away. If it did, it would have little impact on the average consumer.

“It’s a well-designed policy that doesn’t have a large pass through to consumers,” said Shaffer.

“It really is driving emission reductions by cleaning up the way in which you produce whatever good you’re doing.”

The Green Party, NDP and Bloc Quebecois haven’t officially released a carbon tax policy, but have supported green energy initiatives.

In a statement to CTV News, an NDP spokesperson says it’s calling for a new approach, “one that moves beyond the consumer carbon tax and puts the responsibility where it belongs: on the big polluters.”

Fontaine says he will be watching the campaign closely and is optimistic the consumer carbon tax is gone for good.

“Hopefully we can take them at their word that they’re going to do what they say,” he said.