A Distributional Analysis of Federal Carbon Pricing under A Healthy Environment and A Healthy Economy
This report provides a distributional analysis of federal carbon pricing under the Government’s A Healthy Environment and A Healthy Economy plan.
April 17, 2024: Estimates of the economic impacts presented in this report (Table 3-1) reflect the implementation of federal-equivalent carbon pricing at the national level. The counterfactual scenario used in the report reflects the broad removal of carbon pricing—that is, the removal of the federal-equivalent fuel charge and output-based pricing system (OBPS). Estimates of household net costs incorporating “fiscal and economic impacts” reflect the broad economic impact of federal-equivalent carbon pricing.
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Incorporating economic impacts into our distributional analysis helps to provide a more complete picture of the overall impact of the federal carbon pricing system on households under the federal backstop.
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Under the Government’s HEHE plan, most households in Alberta, Saskatchewan, Manitoba and Ontario will see a net loss resulting from federal carbon pricing. That is, the costs they face—including the federal carbon levy, higher GST and lower incomes—will exceed the Climate Action Incentive rebate they receive.
Parliamentary Budget Officer