A general rule in politics is to take credit when the government hands out money and to get someone else to post news of fee hikes, usually late on Friday before a long weekend.
This is why then-President Donald Trump ordered his name to be on all the $1,200 stimulus cheques sent to 70 million Americans in 2020.
So it is causing consternation and amazement in Canadian political circles that millions of Canadians don’t even know they are getting the carbon tax rebate, let alone who they should thank for them.
According to a poll last November by the Angus Reid Institute, a quarter of Canadians in the seven participating provinces receiving the federal rebate don’t think they are getting a rebate. Another quarter are unsure about the rebate or its amount. And 34 per cent say they pay more in carbon tax than they get in rebate.
Which leaves only 17 per cent aware and satisfied with their rebate payments.
The institute did not break out results for the Yukon, but they are probably similar. (And it is probably good they did not ask Ontario taxpayers if they were aware of how much of their tax money goes to Yukon transfer payments.)
Here in the Yukon, we have a slightly different system. We pay the federal carbon tax, but the Yukon government opted to create a Yukon-specific rebate system.
The Angus Reid poll made me check my own bank account. Sure enough, on Jan. 4, I received my payment of $93.
But my bank statement did not say “Free money from your caring Yukon government.” Instead, buried between various other tedious entries, the line item was “Electronic Funds Transfer DEPOSIT CANADA.”
Clearly, the comms department fanned on the pass this time.
The feds have since announced they plan to rebrand their rebate as the “Canada Carbon Rebate” and to ask the banks to better label the payments in those provinces. We’ll see what the Yukon government does.
The non-partisan federal Parliamentary Budget Office (PBO) produced some facts that will be of interest to the 34 per cent of Canadians who think they pay more than they get.
PBO estimates that a majority of Canadians in participating provinces will get back more in rebate than they pay in carbon tax. This is the direct carbon tax payments and rebate cheques, not counting the broader macroeconomic ripple effects of carbon pricing.
Interestingly, the results vary by province. Next year’s rebate will be biggest on average in Alberta, where the average household will get an annual rebate that is $492 more than they pay in carbon tax.
If you’re wondering how the average household can get more than they pay, one reason is because businesses pay the carbon tax but don’t get a rebate in most provinces. The average Canadian’s personal rebate is, in effect, topped up by large and small businesses (in the Yukon, businesses can apply for a rebate too).
Which PBO says is the reason why Nova Scotia has the smallest rebate, with the average household netting $29 or 17 times less than their Albertan cousins. With its “relatively low share of exports,” carbon tax revenue will be “generated almost entirely from household energy consumption.”
In terms of export industries, the Yukon is more like Nova Scotia than Alberta.
PBO did not analyze Yukon data. But last year, Whitehorse residents got $93 per quarter or $372 per year. That works out to $744 for a two-person household (the Yukon does not have an extra payment for children like in the provinces).
This is the gross payment, before netting out what the average household paid in carbon tax. If you heat with wood, walk to work and don’t use fossil fuels at all, this is also your net rebate. Things will differ if you heat with propane, commute in a pickup from country residential and carve on a Ski-doo Freeride with the Rotax 850 E-TEC Turbo.
The Yukon government says that its rebate returns “more, on average, to Yukoners than individuals and businesses pay in carbon levies.”
As reported earlier in the News, rebates here are generally going down this year. The federal government’s exemption of home-heating fuel, criticized by many as political pandering to the Maritimes where oil is widely used, has also been applied in the Yukon. According to Yukon Finance, in 2022 Yukoners used 32 million litres of heating oil, which would translate at 2022-23’s carbon tax rate into $4.5 million.
With a higher tax rate this year, heating-oil users will save even more than $4.5 million. This leaves the fund relying on just propane users, motorists and other fossil fuel buyers. With a smaller fund, rebates for everyone go down.
The feds also increased the rebate supplement for remote households from 10 per cent to 20 per cent. And the carbon tax rate will rise on April 1 from $65 per tonne to $80 per tonne, on its way to $170 per tonne by 2030.
When you factor in all these things, the quarterly rebate for each adult Yukoner next year will be $77 instead of $93. The remote supplement for people who live outside Whitehorse will be $15 instead of $9.30.
We don’t know the net impacts on Yukoners of different incomes, subtracting how much tax people pay from their rebate. People with higher incomes tend to pay more carbon tax since they have bigger houses, bigger vehicles and more gas-guzzling toys.
In Nova Scotia, for example, the fifth of households earning the least money see a net benefit of $353 per year. The top fifth, on the other hand, are net payers of $220.
Economists tend to like carbon-tax systems like the one we have now, other than the exemption for one kind of heating system. Carbon taxes send a signal to everyone to use less fossil fuel, while the rebate compensates the less well off.
Politically, however, it is a different story. Especially if large numbers of voters don’t even know they are getting a rebate.
Keith Halliday is a Yukon economist, author of the Aurore of the Yukon youth adventure novels and co-host of the Klondike Gold Rush History podcast. He won the 2022 Canadian Community Newspaper Award for Outstanding Columnist.