The Real Cost of the Carbon Tax


On April 1, 2019, Justin Trudeau’s carbon tax came into effect.  Trudeau’s carbon tax is set at $20 per tonne for 2019 and will rise by 10$ per tonne every year until reaching $50 per tonne in 2022. 

This will result in an increase in gas prices by 4.4 cents per litre in 2019, rising to 11 cents per litre by 2022. 

But that isn’t the only cost of Trudeau’s carbon tax.

Canada’s Parliamentary Budget Officer released a report on May 22, 2018 called “The Impact of a Pan-Canadian Carbon Pricing Levy on PBO’s GDP Projection” that concluded that by 2022 Canada’s economy would decline 0.5% every year as a result of the Trudeau carbon tax.  Click here to read more.  

This figure of 0.5% of Canada’s GDP (gross domestic product) has been dismissed as “small” by many commentators. 

But what does 0.5% of GDP really mean?   

That’s $10 billion every year, or $50 billion over 5 years.  

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For an average family of four that would be a loss of nearly $5,500, as economists Neil Veldhuis and Elmira Aliakbari have pointed out.  Click here to read more.  

And there is no telling what the ceiling will be for Trudeau’s carbon tax. 

Carbon tax advocates have stated that in order for Canada to achieve the United Nation’s Paris Accord targets, the carbon tax would need to double, or triple, in price, or perhaps increase even more than that.  That would result in a carbon tax of $200 to $300 per tonne.  

And none of that even considers the indirect costs that the carbon tax will have on Canadians.  

First, the second part of Trudeau’s plan applies a carbon tax on industry – the costs of which were not included in the report from the Parliamentary Budget Officer.  This part of the carbon tax will increase the cost of production of goods in Canada - a cost that will be passed on to the consumer.   

And other indirect costs include but are not limited to the impact on Canada’s exporters - who will be unable to pass off the increased cost of producing their goods to international markets and will thus have to choose between raising the price of their goods in Canada, relocating, or shrinking the size of their workforce or their wages.  

Trudeau has falsely claimed that their carbon tax will leave Canadian households better off.   

He wants everyone to believe that Canadians will receive more in government hand-outs than they will pay for the carbon tax.  

But of course, that simply doesn’t make sense.  If Justin Trudeau wanted to give Canadians all of the money back that the federal government will collect with a carbon tax, there wouldn’t be any point in implementing the tax to begin with.   

There’s a real cost to Canadians as a result of Trudeau’s carbon tax.   

But Justin Trudeau doesn’t want to tell us what that number is. He just wants Canadians to pay for it later.

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