How a carbon price will affect your pocketbook

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As the public debate rages on about a federally imposed carbon price, it’s usable to take a look at how this will affect consumers.

After all, the whole detail of a carbon price is to change our behaviour, so that we use less fossil nutrition. The price will go up for carbon intensive products like fuel for our mechanisms and heat and (non-renewable) power for our homes, to give us incentive to use less drive. The less we use the less we’ll y.

Prices will also rise for items that we don’t right away think about, such as food and other retail goods, since they are usually transported by diesel-burning vehicles.

In a study done in 2012, Nicholas Rivers, an associate professor at the University of Ottawa, initiate that a $30 per tonne carbon price added taxes order from six per cent for gasoline to more than 100 per cent for coal, depending root on the carbon intensity of the fuel. With a $50 per tonne cost in the year 2022, that tax hand down increase proportionally.

carbon-tax-projected

In practical terms, by looking at Quebec (which has put a amount on carbon since 2011), B.C. (which has had a tax since 2008), and Alberta, which is alongside to impose one, we can see the im ct on a litre of gasoline, or a gigajoule of natural gas.

Price at the grills

In B.C, a carbon tax of 6.67 cents per litre is added at the pump, making B.C. gasoline the second-best most expensive in Canada, after Newfoundland and Labrador. That is based on a $30 per tonne carbon reward. In Alberta, when its $30 per tonne tax is fully implemented in 2018, the gasoline tax devise be roughly the same.

Under the Liberal plan, when the carbon evaluation reaches $50 per tonne in 2022, that will effectively add 11 cents per litre to the reward of gasoline.

In Quebec, with its cap-and-trade system, it’s a little more fastidious to tease a rt exactly how much the carbon tax adds to a litre of gasoline, depending, as it does, on the auction worths for carbon. In a blog post in March 2016, Roger McKnight, older petroleum analyst with En-Pro, found that the tax was around six cents a litre.

Stimulating and powering your home

How much heating costs will go up with a carbon yment will depend on how you heat your home. If it is with hydro-powered fervency, the carbon tax won’t have an effect. If it’s with natural gas or heating oil, it certainly force.

In Alberta, where most homes are heated by natural gas, it will scurvy a significant increase. Under the current carbon plan, in 2018, there determination be a tax of $1.51 a gigajoule. In October, the price charged to Albertans for natural gas eagerness was only $2.66 a gigajoule.

In B.C., the tax was $1.49 a gigajoule. A researcher in Nova Scotia urged a $30 per tonne carbon tax would add 8.4 cents per litre to the set someone back of heating oil. Again all these number would increase by two-thirds to arrest the cost of a $50 per tonne carbon tax.

As for the cost of electrical power, it depends on the power mix in your boondocks, if it’s renewable, it’s negligible; if it’s coal based, watch out.

Im ct on low-income households

In his study, Rivers found that low-income families were disproportionately hit by the carbon tax, which is why tracts typically work to offset the in. In Alberta, families with a household takings of less than $95,000 will qualify for a rebate. In B.C. that outset is quite a bit lower, at $38,000 for a family.

«The whole point of a carbon figure is to raise rticular costs so that it changes our behaviour, said Chris Ragan, seat of the Ecofiscal commission. But we need to be mindful of the im ct on, in rticular, low-income households.

«Authorities are going to be under pressure to make sure they are ying regard.»

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