Canada's price on carbon only contributes 0.15 percentage points to inflation, Bank of Canada Governor Tiff Macklem reiterated on Thursday amid claims by the federal Conservatives that the pricing plan is a significant driver behind inflation.
"The carbon tax goes up periodically and when we forecast inflation, we know what the carbon tax is going to do, so yeah, we build that into our forecast just the way we build in other fiscal decisions," Macklem said on Thursday.
Carbon pricing is based on the idea that higher fuel costs will result in lower usage and an overall decrease in emissions. To counterbalance the impact of those higher costs, the federal government issues rebates to Canadians in the form of the climate action incentive payment. However, Conservative Party leader Pierre Poilievre and other members of the official opposition have repeatedly slammed the carbon price for making fuel, groceries and other goods noticeably more expensive for Canadians.
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