PBO updates federal carbon pricing estimates to reflect recent provincial changes

February 4, 2020, OTTAWA – The Parliamentary Budget Officer (PBO) has released an updated estimate of the fiscal impacts of the federal carbon pricing system, which incorporates recent program changes in Alberta and New Brunswick.

The latest report, “Reviewing the Fiscal and Distributional Analysis of the Federal Carbon Pricing System,” estimates that the federal government will collect $2.81 billion in direct revenues in 2019-20 from the fuel charge and output-based pricing system.  This amount will rise to $8.27 billion per year by 2022-23.  The majority of these amounts will be returned to households in these provinces.

In addition, the PBO estimates that the federal government will collect $99 million from GST on carbon pricing in 2019-20, an amount which will almost triple by 2022-23.

The PBO’s numbers have been revised to reflect Alberta’s entry into the federal program on January 1, 2020 and New Brunswick’s transition to a provincial fuel charge in April 2020.

Other provinces currently under the federal system are Ontario, Manitoba, and Saskatchewan.

“Under the federal government’s current rebate structure, most households will still receive more than what they pay in fuel charges,” said Yves Giroux, PBO. “However, once the provincial and federal sales taxes on carbon pricing are accounted for, these amounts will be lower on a net basis when compared with the analysis in our previous report.