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Carbon tax must rise if Canada is to meet Paris emission targets, PBO says

OTTAWA — The parliamentary budget officer says the federal carbon tax would have to rise over the coming years if the country is to meet emission-reduction targets under the Paris climate accord.

The issue is by how much and whether the costs are shared broadly.

The carbon tax is already set to rise to $50 per tonne of emissions by 2022 and the Liberals have not said what the path for the levy might be after that.

In a report this morning, budget officer Yves Giroux estimates the tax will have to rise to $117 per tonne by 2030 if it is applied to all industries.

But if the government caps the levy at $50 per tonne for big industrial emitters, households and other sectors of the economy would have to cover the difference, requiring a levy of $289 per tonne in 2030. 

The scenarios envisioned by the budget office assume the federal fuel charge applies to all provinces and territories post-2022, and that carbon taxes are the only measure used to close the emissions gap.

This report by The Canadian Press was first published Oct. 8, 2020.

The Canadian Press

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