Farmers Forum staff
OTTAWA — No surprise to anyone with common sense, but it turns out that the consumer carbon tax did fuel inflation in Canada, based on the real-world impact of eliminating the unpopular levy. The Bank of Canada’s April 2025 report shows that the inflation rate fell to 1.7% from 2.3% — a 26 % decline — during the first full month since the elimination of the tax. The proof was especially evident at the pump, with gasoline prices down 18.1% from a year earlier.
In a stunning policy reversal, the Liberal government, now led by Prime Minister Mark Carney, scrapped the unpopular tax on April 1, 2025.
The Bank’s measured findings stand in stark contrast to its own earlier claims as well as the claims of more than 300 economists who pegged the carbon tax’s inflationary impact at only 0.15 % in a March 2024 open letter, which aligned with the position of the Liberal government at the time. Critics, including Conservative leader Pierre Poilievre, argued that the tax drove up costs for fuel and groceries, a position vindicated by the Bank’s latest numbers.
Dalhousie University food professor Sylvain Charlebois said that Canadians were “misled” on the inflationary impact of the carbon tax by those economists and other institutions. “One of the most misleading campaigns Canada has seen in decades. Shameful,” he wrote in a social media post.
