The federal carbon tax adds almost half a percentage point to inflation, says Bank of Canada Governor Tiff McClem.
McClem testified in front of the household committee on March 3, when Conservative Party Philip Lawrence asked how the carbon tax affected inflation. Macklem did not have the number available at the time, but responded in writing to the Commission in a letter dated March 11.
“I promised to answer the question about the impact of carbon pollution rates on inflation,” McClem wrote.
“According to World Bank calculations, removing rates from the three major fuel components of the CPI (gasoline, natural gas and fuel oil) will reduce inflation by 0.4 percentage points.”
Macklem wrote that if the bill came into effect in early 2022, inflation in January was “4.7% instead of 5.1%.”
McClem also said at the Commission’s March 3 meeting that an annual increase in what he calls “carbon pollution charges” adds 0.1 points to the Consumer Price Index (CPI) each year. Clarified. He said inflation in January would have been “5.0% instead of 5.1%” if the federal carbon tax had not been raised.
Expecting Conservative MPs and leadership, who have long argued that inflation is not only a global phenomenon claimed by the government, but also supported by domestic policy, Pierre Poirievre immediately responded to McClem’s remarks. I jumped at it.
Poilievre opposed the carbon tax and used Macklem’s words to shoot his leadership race rivals.
“Bank governors admit that carbon taxes are spurring inflation. [Patrick] Brown, Trudeau, [Jean] Share supports carbon taxes.I’m always against it and throw it away, “he said. I have written On Twitter on March 14th.
Share supports certain carbon taxes, Cap and trade The system when he was the Premier of Quebec.
Brown supported pricing carbon emissions when he was the leader of Ontario’s Progressive Conservative Party, but as Mayor of Brampton, he recently set a carbon tax on April 1st. I begged the federal government not to proceed with the increase. 11 cents per liter for the price of gasoline.
Latest inflation data According to Statistics Canada, the CPI of 5.1% in January was the highest since September 1991. Excluding gasoline, January’s CPI rose 4.3% year-on-year.
Bank of Canada Rose On March 2nd, the rate was 0.5 percent in an attempt to start stopping inflation. The next announcement of interest rate targets is scheduled for April 13, and the World Bank will also announce a complete outlook for inflation and the economy.