Liberal MP Criticizes PBO for Error in Carbon Price Analysis

In a recent development, a Liberal member of Parliament has called out the Parliamentary Budget Officer (PBO) for not issuing a more public correction to its carbon price analysis after discovering an error in it. The PBO admitted to including the impact of the industrial carbon price in its economic analyses of the consumer carbon price for both 2022 and 2023, leading to skewed results.

The PBO plans to publish an updated analysis in the fall to rectify the mistake. However, Liberal MP and parliamentary secretary Ryan Turnbull believes that the PBO should have taken greater measures to inform the public of the error and explain how it may have affected the results. Turnbull emphasized the importance of maintaining the integrity of the PBO’s office, especially in the midst of ongoing political debates surrounding carbon pricing.

The original analyses by the PBO suggested that while most families would receive more in rebates than they paid in carbon pricing, the benefits would be offset by the impact on job growth and incomes. This information has been used by the federal Conservatives to argue that the carbon price is financially detrimental to Canadian families. However, critics have pointed out that the analysis fails to consider the economic costs associated with climate change.

Turnbull echoed these concerns in his letter to the PBO, emphasizing the need for a more holistic approach to analyzing the impact of carbon pricing. He highlighted the importance of factoring in the costs of climate change to provide a more comprehensive understanding of the issue.

The PBO has previously conducted work on the economic costs of climate change, but has not included this information in its carbon price analysis. PBO Yves Giroux explained that conducting a social or cost-benefit analysis in this context is complex and challenging.

The call-out by the Liberal MP underscores the importance of accurate and transparent analysis in shaping policy decisions related to carbon pricing and climate change. The public awaits the PBO’s updated analysis in the fall to provide a clearer picture of the economic implications of carbon pricing in Canada.