Would the Liberals' climate plan really add 31 cents to pump prices?
Future price of carbon and context of proposed clean fuel standard are key factors
Lucas Powers · CBC News · Posted: Sep 27, 2019 3:59 PM ET | Last Updated: an hour ago
Some experts say the Conservatives are cutting corners with the math they're citing in their messaging on the carbon tax. (CBC)
As part of our federal election coverage, CBC News is assessing the truthfulness and accuracy of statements made by politicians and their parties.
The Claim: "We know that, in addition to the carbon tax, the Liberals are proposing a fuel standard which would increase the cost per litre of gasoline by a tremendous amount — altogether increasing the cost of a litre of gasoline by over 30 cents a litre."
— Conservative Leader Andrew Scheer
Central to the Conservatives' campaign message is the claim that Liberal efforts to curb greenhouse gas emissions would cost Canadians more at the pumps. Andrew Scheer has promised that a Conservative government would scrap two central pillars of the Liberal's climate change plan: carbon pricing and a proposed clean fuel standard.
The Conservatives say that, combined, the two measures would increase the cost of one litre of gasoline by 31.1 cents. A new ad rolled out by the campaign this week features that figure prominently.
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Background materials circulated by the party shed light on how it came to that conclusion. The carbon tax, the Conservatives say, adds 22.5 cents to each litre, while the clean fuel standard would add 5 cents. Add those two numbers together, factor in HST and you get to 31.1 cents.
Is that calculation an accurate estimate of what Canadians could expect to pay under the Liberal plan? Not really.
The Conservatives' math depends on a number of assumed outcomes linked to carbon pricing that the Liberals have said wouldn't happen if they are re-elected. Their math depends on a figure for the clean fuel standard pulled from a think tank report. But one of the authors of that report argues the Conservatives are neglecting critical context.
Justin Trudeau's government first announced its intention to impose a clean fuel standard in 2016. The regulation is meant to encourage the development and use of low-carbon fuels throughout the economy and give industry an incentive to come up with new clean technologies.
The Liberals have said that their policy would focus first on liquid fuels, like gasoline and diesel, and eventually apply to gaseous and solid fuels as well. The first phase wouldn't come into effect until 2022.
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Environment and Climate Change Canada estimates the clean fuel standard could reduce greenhouse gas emissions by 30 megatonnes per year by 2030, making it one of the core elements of the Liberal strategy to meet Canada's Paris Agreement commitments.
But what it ultimately would cost Canadians is up for debate. Sean Fraser, a Liberal candidate and parliamentary secretary to the minister of environment, said earlier this year that it is still too early "to do an accounting" on costs linked to a policy that was not fully developed at the time.
Clean Energy Canada, a think tank based at Simon Fraser University, analyzed the potential impacts and costs of the clean fuel standard and published its findings in a 2017 report.
The authors concluded it would increase the price of gasoline by between one and two cents in 2022 before eventually adding 5 cents per litre by 2030 — the figure the Tories are using in calculations.
Climate change took centre stage on the campaign trail this week, with Liberal Leader Justin Trudeau and Conservative Leader Andrew Scheer attacking each other's plans. (Patrick Doyle, Christinne Muschi/Reuters)
Overall, the clean fuel standard would cost the average Canadian household about $5 per month in 2030, the report found.
But Dan Woynillowicz, policy director at Clean Energy Canada, said it makes little sense to look at those projections in isolation.
The same report found that any increases in the price of fuels caused by the clean fuel standard would be "considerably outweighed," on average, by savings derived from other climate change fighting measures. Those measures include things like high-efficiency furnaces, modernized building standards and the proliferation of hybrid and fully electric vehicles.
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"We found that while the clean fuel standard will cost the average household $5 a month in 2030, that same household's energy costs will have declined $22 by then, meaning they're actually coming out ahead to the tune of $17 a month," Woynillowicz said.
Clean Energy Canada released a statement this week accusing the Conservative campaign of misrepresenting the report's key findings and cherry-picking statistics.
$102 per tonne carbon tax?
And what about the potential for price increases driven by the carbon tax?
In their math, the Conservatives have pegged the carbon tax at $102 per tonne. That figure comes from a report issued by the Parliamentary Budget Officer, which concluded that the price of carbon would have to rise to that level by 2030 for Canada to hit its Paris Agreement target.
But the carbon tax currently amounts to $20 per tonne of emissions, which would increase to $30 per tonne next year and to $50 a tonne by 2022 under the Liberal plan — adding about 11 cents to the cost of a litre of gasoline.
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After the PBO published its report, Liberal candidate and federal Environment Minister Catherine McKenna said that the government had "no plan to increase the price post-2022. For Conservatives to suggest otherwise is simply false and misleading."
She also pointed to the fact that the carbon tax and clean fuel standard are not the only tools at a government's disposable in the fight against climate change. The Liberals' plan to phase out coal-powered electricity by 2030, for example, would result in significant emissions reductions in the coming decade.
A Liberal government could also opt to use more stringent regulations — such as ramping up fuel efficiency requirements for cars and trucks — in concert with other measures to reach Canada's 2030 goal, Woynillowicz said.
"This isn't a binary thing where if we don't raise the price of carbon there's no way we'll hit our Paris targets, or if we raise the price of carbon we absolutely will meet the targets. It's not that straightforward," he said.
In an interview with the Globe and Mail in August, McKenna said a Liberal government could re-evaluate the carbon price near end of its mandate but did not say it would actually increase.
It's not currently known if a carbon price of $102 per tonne would ever happen. So the Conservatives may be overestimating the potential impact on gas prices.
Sources: Scheer vows to scrap clean fuel standard, calls Liberal plan a 'secret fuel tax', CBC News; What a Clean Fuel Standard Can Do for Canada; Clean Energy Canada; Trudeau's increase to the carbon tax makes life more expensive for Canadians, Conservative Party of Canada; Closing the Gap: Carbon pricing for the Paris target, Parliamentary Budget Officer; McKenna backs off pledge to freeze carbon tax at $50 a tonne, Globe and Mail; Justin Trudeau signs Paris climate treaty at UN, vows to harness renewable energy, CBC News;
ABOUT THE AUTHOR
Lucas Powers is a Toronto-based reporter and writer. He's reported for CBC News from across Canada. Have a story to tell? Email firstname.lastname@example.org any time.