PBO’s Economic Analysis of New Fuel Regulations ‘Unbalanced’ and ‘Incomplete,’ Environment Minister Says

PBO’s Economic Analysis of New Fuel Regulations ‘Unbalanced’ and ‘Incomplete,’ Environment Minister Says
Minister of Environment and Climate Change Steven Guilbeault rises during question period in the House of Commons on Oct. 21, 2022. (The Canadian Press/Adrian Wyld)
Peter Wilson

Environment Minister Steven Guilbeault says the recent analysis issued by Parliamentary Budget Officer (PBO) Yves Giroux on the economic impact of the federal government’s incoming Clean Fuel Regulations (CFR) is “unbalanced” and “incomplete,” adding that he disputes some of the numbers Giroux outlines in his report.

“While we recognize the work of the PBO, their analysis takes the same unbalanced modeling approach as they did with the analysis of the price on pollution,” Guilbeault said in a statement on May 19.

The environment minister said the PBO “fails to recognize the cost of climate change to Canadians” and that Giroux’s report draws “price impact conclusions that are substantially greater” than the figures Guilbeault’s department provided him.

The CFR, which is set to take effect July 1, will require fuel producers and importers to reduce the carbon intensity of the gasoline and diesel they produce and sell in Canada, with the standards increasing gradually every year until reaching full stringency by 2030.

The budget officer wrote in “A Distributional Analysis of the Clean Fuel Regulations” on May 18 that the CFR will increase the cost of gas across the country by an average of about 17 cents per litre by 2030 while also decreasing Canada’s GDP by upwards of $9 billion.

The PBO report said the numbers were drawn from figures provided by Environment and Climate Change Canada (ECCC).

Shortly after Giroux’s office released the report, Guilbeault spoke with reporters on Parliament Hill to voice his disagreement with the PBO’s analysis. He said there were “a number of numbers” included in the report with which his department disagrees.

“It is a very partial analysis,” he said. “You’re asking me what I disagree with? I disagree with the fact that it’s a very incomplete analysis. That’s what I fundamentally disagree with. If you have an incomplete analysis, of course your numbers and your conclusions will be skewed.”

Giroux responded to Guilbeault’s comments by saying his office used the “ECCC’s own data and economic results to estimate the distributional impact of the CFR” while also pointing out that the report outlined both the CFR’s benefits and drawbacks.

“Over the years we have estimated the costs of many policy proposals without assessing their potential benefits,” Giroux told The Epoch Times.

Commenting on the PBO’s report, Conservative Party Leader Pierre Poilievre called the CFR a “second carbon tax” and said Giroux’s figures show Canadians will be “paying more at the pump and for everything else.”

Other Conservative MPs also criticized the CFR, with finance critic Jasraj Singh Hallan referring to the Liberal government’s climate policies as “woke climate zealot ideology.”