P.E.I. carbon tax pays back more than it collects, says auditor general

·1 min read
Currently 6.63 cents of the cost of a litre of gas is carbon tax. (Kevin Yarr/CBC - image credit)
Currently 6.63 cents of the cost of a litre of gas is carbon tax. (Kevin Yarr/CBC - image credit)

During its first year, P.E.I.'s carbon tax program paid back $5 million more to Islanders than it collected, according to an analysis by the provincial auditor general.

The auditor general's report was released Tuesday.

The carbon tax was introduced as a 4.42-cent-per-litre levy on gasoline and a 5.37-cent-per-litre levy on diesel on April 1, 2019.

P.E.I. Auditor General Darren Noonan examined how much was collected in those first 12 months and how much was paid out in related programs.

The province collected about $13 million and paid out $18 million in rebates or other initiatives.

Those initiatives included a reduction in gas taxes, free drivers' licences, reductions in motor vehicle registration costs and a reduction in transit fees.

The free driver's licences and breaks on registration fees ended in January 2020. The carbon tax money is now being spent on a new five-year Active Transportation Fund, helping build new walking and biking paths. (See link at bottom of story.)

The current levy is 6.63 cents on gas and 8.05 cents on diesel.

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