Clean Prosperity Welcomes Federal Carbon Price and Rebates to Canadians
Federal Carbon Price System 90% Revenue Neutral – Small Business Tax Cut Could Make it 100%
OTTAWA, Oct 23, 2018 /CNW/ - Canadians for Clean Prosperity welcomed the announcement that 90% of revenues raised from fuel charges under the federal government's backstop carbon price will be returned directly to households.
"This system comes close to the recommendation made by Clean Prosperity to return all revenues from the federal carbon pricing backstop to Canadians consumers and families," said Mark Cameron, Executive Director of Canadians for Clean Prosperity. "We think the federal government is doing the right thing in putting a price on carbon in those provinces that have not done so, and in returning the money directly to households. This will ensure that Canada has a price on all fossil fuel emissions, which will encourage lower emissions, while also ensuring that Canadian families will not be negatively affected."
The government's estimates, which are close to the figures estimated for Clean Prosperity by EnviroEconomics (link to report), show that the average household will receive a larger rebate under this system than they will pay in carbon costs.
Clean Prosperity notes that while 90% of the revenues raised in Saskatchewan, Ontario, Manitoba and New Brunswick will be returned to households, that about 10% of revenues have been set aside to support small and medium sized-business and municipalities, schools, hospitals and indigenous communities to help deal with their carbon costs.
"We think it is appropriate to recognize the carbon costs that small and medium sized businesses and others will face as well as households,' said Cameron, "But we would prefer that money be returned by reducing taxes on small and medium sized businesses. We would recommend that the federal government cut the small business tax rate in all provinces by .5% in 2019 and 1% in 2022, using the small business share of carbon revenues in the provinces under the backstop to pay for the small business tax cuts in those provinces."
Cameron noted that the cost of a full point reduction in the small business tax rate would be roughly $800 million, while the amount to be returned to small businesses in the four affected provinces – which represent roughly half of Canada's GDP – when the carbon price is fully phased in would be just under $400 million. "Cutting the small business rate everywhere would help small business in those provinces falling under the backstop, while rewarding small business in those provinces that have already brought in their own carbon price," Cameron said.
SOURCE Canadians for Clean Prosperity
Mollie Anderson, [email protected], 6478232155
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