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Fiscal Watchdog Finds Canada Carbon Tax Went the Wrong Way

March 10, 2021, 5:04 PM

Driving costs went down in one Canadian province after the federal government imposed a carbon tax, a fiscal watchdog has found—the opposite of the tax’s intended effect.

Prince Edward Island collected C$13 million (U.S.$10 million) between April 1, 2019, and March 21, 2020, through the carbon tax, but the sum was more than offset by provincial cost-reduction programs totaling C$18 million, the Office of the Auditor General said Tuesday.

A C$10.9 million reduction in the provincial gasoline tax was the largest cost-reducing program, the office said.

Canada’s pollution pricing law requires provinces to create a levy on fossil fuels and ...