Environment and Climate Change Minister Steven Guilbeault rises during Question Period in the House of Commons on Parliament Hill in Ottawa, on June 3.Spencer Colby/The Canadian Press
The Liberals are escalating their attacks on the Parliamentary Budget Officer over an error in his carbon pricing analysis, but the federal watchdog has hit back, saying the government is keeping secret data that shows his overall findings are correct.
The day after the federal government released its budget on April 16, the Parliamentary Budget Office posted an update to its website noting that it had included the effects of the industrial carbon price in its economic analysis of the impacts of the consumer carbon price. The result was that it overestimated the negative impact of the consumer carbon price, though it remains unclear by how much.
The low-profile update doesn’t make clear that the office was actually disclosing errors in its reports on the fuel charge from both 2022 and 2023. Those reports have been seized on by the Conservatives and over the last year become a key talking point to justify their “axe the tax” campaign to scrap carbon pricing.
The Canadian Press first reported on the error last week. In a series of subsequent interviews, Parliamentary Budget Officer Yves Giroux has said he believes that, when his office releases a revised analysis in the fall, it will show that there is no material impact on its conclusions.
However, at a Monday press conference, Environment Minister Steven Guilbeault took Mr. Giroux to task for presupposing results that he doesn’t yet have, and for the quiet way in which his office acknowledged the error.
“I’m somewhat troubled by the fact that without even doing any analysis, he would come to the conclusion – before his own office – that this error will have no material impact on the conclusions,” Mr. Guilbeault said.
“I find that very difficult to believe.”
Asked if he still has confidence in Mr. Giroux, the Environment Minister didn’t answer, instead saying it’s up to the budget watchdog to ensure his office maintains high standards: “The ball is in his court.”
The original reports from Mr. Giroux’s office said that, when taking into account economic and fiscal impacts of the consumer carbon price, most households would see a net loss. That conclusion weakened the political position of the Liberal argument in favour of carbon pricing. For years, the government has made the case that the carbon price rebate more than offset the costs of the consumer carbon price for the majority of households.
The budget watchdog’s mistake is not necessarily small, said University of Calgary economics professor Trevor Tombe.
“By including the industrial pricing system, in addition to just the consumer price, it made the economic costs potentially much bigger,” he said in an interview.
However, because of how the industrial carbon pricing system is designed, it’s possible that the overall impact on the budget officer’s findings will be small, said Prof. Tombe, who is also the director of fiscal and economic policy at his university’s School of Public Policy.
He added, however, that without having the corrected analysis, “there’s really no basis for us to know whether the effect will be large or small.”
At the same time as Mr. Guilbeault’s press conference Monday morning, Mr. Giroux was at the House of Commons finance committee defending his office. He also offered a full apology and promised to be more transparent with any errors in the future, but said the message in his reports is not wrong.
Liberal MP Ryan Turnbull accused Mr. Giroux of prejudicing the findings of the pending revised report by saying there will be no material impact in its findings despite not yet redoing the analysis. The Parliamentary Budget Officer replied that his assessment is based on discussions with academics and Environment and Climate Change Canada.
“It doesn’t change the overall conclusions,” Mr. Giroux said.
He added that, despite his reports being out for two years, the government has never released its own data on the economic impacts of the consumer and industrial carbon price systems. Mr. Giroux said his office has seen the government’s internal analysis and that it’s in line with the findings from his office.
“We’ve been told explicitly not to disclose it,” he told the committee.
A statement provided by Mr. Guilbeault’s office did not explain why the environment department is keeping its own economic impact analysis of the government’s carbon pricing regimes secret.
With a report from Bill Curry.