Carbon Tax inflation is nuanced, local and greater than claimed

Average rates of inflation are useless to households who do not pay average bills, just their own

I encountered a shit storm of abuse on X after posting an article outlining the impact of Trudeau’s carbon tax on the cost of living of Canadians. The responses ranged from a self-identified “journalist” with an axe to grind and no knowledge or competence in physics to a macro economist with 35 years of experience, with both ends of the spectrum stridently asserting the carbon tax did not add to inflation materially, relying in part on the Bank of Canada analysis which reported that (other than indirect effects not studied) the carbon tax added 0.15 percentage points to inflation, which critics of my article called a “rounding error”.

The most competent response, although misguided, came from the economist.

LR’s solution was to encourag me to buy a dictionary.

Of course, I at no time suggested Trudeau caused global inflation, only that his useless carbon tax increased the cost of living for Canadian families, and provided an example of a bill I personally received from Enbridge showing that my natural gas bill (I heat my home with gas) was 40% higher in February 2024 than it would have been absent the carbon tax. It is hard to see what that has to do with global inflation since it simply compares the same gas usage at the same gas price for the same period but restates the bill to compare what it would be without the carbon tax and what it was in fact. Here is the bill, in pristine and unadjusted form as I received it from Enbridge and paid.

Page one of the invoice shows that I used less gas in 2024 than in 2023, and was charged a total of $655.30 for one month’s gas usage.

Page two of the invoice set out the details.

It is easy to adjust the bill to carve out the carbon tax. The total excluding the federal carbon charge of $167.64 and HST amounts to $412.27. Add 13% HST and the bill would have been $465.87 including HST.

Since the actual bill wasa $655.30, the “inflation” caused solely by the federal carbon charge and independent of prevailing world economics, global inflation, or the cost of the gas itself, was:

655.30/465.87 - 1 = 40.7%

It seems that arithmetic, certainly within the skill set of grade four students, was beyond the competence of LR, a macro economist with 35 years experience. Or, more likely, LR is a devout Liberal progressive deluded by the belief that CO2 causes climate change, and deluded by Trudeau’s claim that even if CO2 did cause climate change (a physical impossibility) charging Canadians an extra tax would matter, felt the need to brag about career and claim competence without a thought of just how silly it made LR look.

One poster suggested I should buy a Heat Pump, another stupid idea. My log home is heated by radiant in-floor heating and has no ductwork, and no heat pump would provide reliable heating absent some capability to move the warm air it creates to all the rooms of the house without ducts. Heat pumps alone cost on average $8,500 in Ontario and are eligible for another government scam, a taxpayer funded rebate. The benefit of spending taxpayer dollars to subsidize heat pumps might be a benefit to heat pump suppliers but will make zero difference to global temperatures or provide any benefit to anyone except those who think having a heat pump works for their home but didn’t install one because it was too costly. Why should some Canadians pay for an upgrade to some other Canadian’s home?

I had also suggested that a carbon tax on diesel fuel added to the inflation of everything shipped by truck in Canada, a tautology certainly needing no further argument.

I am in awe of the degree to which progressive ideology has made otherwise sensible people incapable of even basic arithmetic and precluded them from applying even the most basic level of common sense. With respect to LR for a long career in which no doubt LR made a useful contribution to society, LR is so misguided therapy is indicated.