Is the carbon tax suffering from a failure to communicate?

Attacks on the carbon tax are both easy and counterintuitive.

The federal price on carbon, implemented in 2019, is still relatively new. After a period of unusually high inflation, Canadians are newly sensitive to the price of goods and necessities. And the carbon tax, by design, increases each year (on April 1, in fact).

Meanwhile, the benefits that derive from putting a price on carbon, and the greater economic and environmental harm that might result from lacking such a policy, are not immediately tangible — although Canada's greenhouse gas emissions are falling.

So when Conservative leader Pierre Poilievre encourages his supporters to chant "axe the tax" and "spike the hike," he's aiming at an easy target.

But unlike most other taxes, and everything else that could be said to be contributing to the cost of goods, the carbon tax comes with a rebate. In fact — as its proponents like to point out — it's estimated that most households receive more from the rebate than they pay in added costs created by the tax.

Given that most people — particularly those with lower incomes — are expected to receive more from the rebate than they pay in additional costs, many households might actually end up worse off if the carbon tax is repealed.

For the sake of comparison, consider federal excise taxes on fuel, which long predate the carbon tax. Since 1995, the excise tax has added 10 cents to every litre of gas. The resulting revenue is not rebated directly to households (although some people with a mobility impairment can apply for a partial refund).

But no opposition leaders or premiers are clamouring right now for Prime Minister Justin Trudeau's government to repeal those excise taxes — perhaps because they generate $5 billion annually for the federal government, $2 billion of which is distributed to provinces to fund municipal infrastructure.

But the political value of carbon tax rebates depends on Canadians being aware that they're receiving them. A lack of public awareness might explain why the federal government recently changed the name of the payment from the Climate Action Incentive to the Canada Carbon Rebate.

In January, Abacus Data asked Canadians in provinces where the federal carbon tax is applied whether they had received a payment from the federal government in the past week. Of the 49 per cent who said yes, the vast majority correctly identified it as a rebate connected to the carbon tax. But that still left 51 per cent who said they hadn't received a rebate.

In fact, the federal government sent carbon rebates to 12 million Canadians in January.

That finding by Abacus might be affected by the fact that, in the case of married and common-law couples, only one person receives the rebate. But the result only gets slightly better for the Liberal government when the question is worded more broadly. In November, a quarter of respondents told the Angus Reid Institute that neither they nor their household had received a rebate in the past year. (Another 12 per cent weren't sure.)

Even among those who had received a payment, 54 per cent said they paid more in the carbon tax than they received in rebates.

Several factors may be undermining the Liberal government's communication efforts. While energy suppliers specify the federal carbon charge on the bills they send to customers, banks are not obliged to clearly label the rebates when deposits are made to Canadians' accounts.