The federal carbon tax is set to increase on Monday. So what's that mean?

Since coming into effect in 2019, the carbon price that Islanders pay on fuel has been slowly creeping up. It started at $20 per tonne of emissions. On April 1st it’ll reach $80.00 a tonne. That means the carbon tax you pay on gas will rise by 3.3 cents up to 17.6 cents a litre. That money goes into a pool and gets returned to Islanders on a household by household basis for the coming year. Rebates have been set at the same level they were this past year, meaning a family of four will get 880 dollars. Well, the tax on gas and diesel is going up. There’s currently no tax on heating oil and Ottawa is doubling the carbon rebate top up for rural residents from 10 to 20%. All that to say for PEI, it comes out as a wash Our rebates won’t change this year at 17.6 cents per litre of gas. That 800 and $80.00 for a family of four will cover the full carbon tax on 5000 liters. If you drive the ever popular Rav 4, that’ll cover about 90 full tanks of gas. Almost two tanks a week, enough to get you from Tignish to Surrey and back again 167 times over the course of the year. If you spend more than that on the carbon tax, you’ll be losing money. But the Parliamentary Budget Office has confirmed what government says, that the majority of households will get back more money than they put in. The first rebate payments for this coming fiscal year are due in mid-april. But it’s not just at the gas pump where the carbon tax is pushing up prices. There’s a considerable amount of added tax that has gone on this that have impact Islanders. And they say it’s one of the reasons why our food prices are so, so high because all of that cost to transport it here is passed on in the end to the consumer. Increasing the cost of fuel pushes up prices on things like groceries. But economists say the impact from the carbon tax is negligible, dwarfed by other factors. You know, the geopolitical instability and the, you know, the Russia invasion in Ukraine disrupting energy markets. We look at other issues related to supply chain. You know, the leftover effects from from the pandemic that that take a while to get ironed out. And in food prices in particular, it’s kind of a kind of a perverse outcome that really there’s a lot of evidence that the increase in food prices is due more to, you know, weather fluctuations and volatility for for temperature, precipitation and and so on. More than 200 economists from universities across Canada signed an open letter this week in support of carbon pricing, saying they wanted to inject sound evidence and facts into the ongoing political debate. Eventually, by 20-30, the carbon tax is supposed to increase up to $170 a tonne, a little more than twice the level it’ll hit Monday. Of course, it remains to be seen if there will still be a carbon tax in 20-30. If there is a report last week said between the consumer tax you pay at the pump and the tax on big emitters, Canada’s carbon pricing could cut emissions by as much as 50%. Economists say there are other ways we could reduce emissions, but they would all cost more. Kerry Campbell, CBC News, Charlottetown.