Gas prices spike as carbon tax takes effect

There are still no signs of a revenue-neutral carbon pricing plan. The current government plan is "budget-neutral", but not revenue-neutral.

Instead of offsetting the carbon tax by collecting less taxes elsewhere, it is offset by the government ordering itself to make sure all of the revenue is spent.

Frankly, that is an insult to the concept of revenue-neutrality.

Just the first rung of the ladder

New Brunswick, Ontario, Manitoba, and Saskatchewan saw gas prices increase by about 4.4 cents per litre starting on Monday.

It also caused increases to the cost of aviation fuel, butane, propane, and natural gas.

Small business owners will be affected the most, with the rebates set at a meagre $170 per person and $339 per family of four.

For comparison, if you get your engine oil changed every 5000km, you can only do that once before you will break even on your rebate for the year.

Despite what fake news the government has spread both at home and abroad, forget revenue-neutrality. Even those who do get enough of a rebate to cover both of their direct and indirect carbon tax costs will effectively be involuntary lenders to the government until they actually received the rebate.

It would hardly be a bold prediction to say that the vast majority of families would pay more under this new tax, and unfortunately, things will only get worse.

These are just the first set of carbon tax rates that are set to increase by more than double.

Over the next three years, the government's planned increases alone would see the carbon tax on gasoline reach over 11 cents per litre.

However, even those increases will not nearly be enough to give us any hope of reaching Paris Climate Agreement targets, which means the excuse is always there to introduce even further tax hikes.

Exemption for big business

The government has also introduced an output based pricing system that will allow big business to recoup some of their carbon tax losses. This is to prevent them from becoming noncompetitive.

Fair enough, but why is big business getting a break but not the struggling family with kids that need rides to school?

The detrimental economic impact of taxes tend to "trickle up". Some tax hikes create benefits for the whole that outweigh the negative economic impact, but the government is hardly trying to pretend that is the case here.

The country is walking into a new tax completely blind to what it might cost and to how much it will even reduce emissions.