What the 'inadvertent error' in the PBO's carbon tax analysis means, in as plain English as possible
CBC
The next time you feel bad about a mistake in your line of work, spare a thought for the folks at the Parliamentary Budget Office.
One can only imagine the sinking feeling in their stomachs when they realized they had based their high-profile analysis of the federal fuel charge — commonly known as the carbon tax — on calculations that included more than just the federal fuel charge.
It turns out the PBO's complex computer code had actually included the federal output-based pricing system — commonly known as industrial carbon pricing — when it wasn't supposed to.
Whoops.
The PBO quietly updated a section of its website in mid-April to fess up to the mess up and retroactively added a note to its previously published reports. But it took until this week for many people to actually notice.
Speaking Wednesday on CBC's Power & Politics, Parliamentary Budget Officer Yves Giroux described it as an "inadvertent error," He said it would take until the fall for his office to rerun all its modelling and come up with corrected numbers.
Giroux also said he didn't believe the error would make a huge difference to the PBO's estimates of the "fiscal and economic" costs of the carbon tax. But University of Calgary economist Trevor Tombe isn't so sure about that.
"I think it would be very hard for anyone to know in advance what the results are going to be just based on gut feeling," he said.
So at this point you're probably wondering: If the PBO can't get this straight and other economists aren't sure what's going on, what hope do I have to understand all of this? It's a fair question. And the answer is: You've got this. Even non-experts can wrap their minds around a boiled-down version of Canada's carbon-pricing policies.
Yes, this is complex stuff. But it's also important stuff.
Canadian companies are making multibillion-dollar plans based on carbon pricing. The carbon tax is shaping up to be a primary issue in the next federal election, and climate change a defining issue of our global future. To say the stakes are high would be an understatement.
So let's break this down.
When people talk about the federal "carbon tax," they are typically referring to the surcharge most Canadians pay when filling up their vehicles and the extra fee on their natural gas bills, which are accompanied by rebates that are direct-deposited into their bank accounts every three months.
This consumer-level carbon-pricing system is the target of Conservative Leader Pierre Poilievre's "Axe the Tax" mantra.
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