Even if the federal carbon price does not apply in Quebec, customers can see this “tax” appear on their propane gas bill, revealed a Quebec MP in Ottawa. A practice that might be misleading, warns the Consumer Protection Office.
« [Sur] my own propane bill, [il] is clearly written that I pay a carbon tax of 6.2 cents per litre,” protested Conservative MP Pierre Paul-Hus, brandishing his own bill during question period last Wednesday.
The elected representative from the Quebec City region wanted federal Environment Minister Steven Guilbeault to admit that he had misled the House of Commons by claiming that federal carbon pricing did not apply in Quebec. His colleague from Beauce, Richard Lehoux, had just said that “the carbon tax clearly affects Quebec”, particularly farmers who use gas for heating.
Who is telling the truth? On the Capital Propane invoice, that The duty was able to consult, we can actually read that such a “carbon tax” is invoiced to MP Pierre Paul-Hus on the volume of gas purchased. This, even if Quebec uses a different model for trading carbon credits purchased on a common exchange with California.
“There is one, a carbon tax! ” does not deny Patrice Breton, vice-president of the Beauceron company Propane GRG, parent company of Capital Propane.
The supplier explains that it performed complicated calculations to estimate what it pays through the Quebec cap-and-trade system for emission rights (SPEDE), in order to apply it to the customer’s bill. It is this price that appears on a particular line, called “carbon tax”.
A complex calculation
A fuel purchasing expert, Mr. Breton explains over the phone how complicated it is for companies like his to know with certainty how much it will cost them in offset credits for the carbon that will be emitted by the combustion of their propane, such as as the law dictates. From his point of view, the federal pricing system is in fact much better, since it is simpler, than the carbon exchange model chosen by Quebec.
“Honestly, the Ontario system [où prévaut le prix fédéral]it’s simple: if you sell to everyone […]you charge him the price that is prescribed by the government and at the end of the month, you send the money to the government, like the GST or the QST,” he compares.
Since the law expressly prevents him from disclosing any “bidding strategy” on the competitive carbon exchange, he is not allowed to detail the precise calculation behind the posted price of carbon on his propane (6.2 cents per liter).
Typically, companies may decide to initially purchase large amounts of credits at auctions, held four times a year, and include the invoice in their prices; they can also sell their fuel first and then buy offset credits, with the risk of financial loss caused by a higher price or a worse exchange rate.
The last bidding round ended last Wednesday, and the price per tonne of carbon will be displayed on Thursday February 23. During the last round, in November, the price had arrived at 35.62 Canadian dollars. Companies that had bet less then had to fall back on the secondary market of carbon credit resellers, explains Mr. Breton. Thus, “not all suppliers have the same cost and the same price in Quebec”, given the complexity of the system.
“I find it a little flat in a way, because they say that the carbon tax was there to save the environment at the beginning, but in the end, there are plenty of institutional investors who get on board and come to play [sur le prix] to try to make a profit out of it. »
What the law says
The Consumer Protection Office (OPC) did not comment on the specific example of the Capital Propane invoice from the MP for Charlesbourg—Haute-Saint-Charles. As a general rule, the law prohibits merchants from demanding a price higher than that which is advertised.
It is specified that merchants have the right to provide details of the various components of their prices, provided that they always display the total amount that the consumer will pay, with the sole exception of Quebec sales taxes (QST) and on Goods and Services of Canada (GST).
“The term “carbon tax” found on the invoice might be misleading within the meaning of section 219 [de la Loi sur la protection du consommateur]since it is not really a tax”, writes Charles Tanguay, the spokesperson for the OPC.
Lawyer at the Center québécois du droit de l’environnement, Marc Bishai confirms that neither the Quebec regime nor the federal regime in fact corresponds to the definition of a tax. The Supreme Court of Canada came to this conclusion in its 2018 judgment which validated the federal approach to carbon pricing.
“The majority justices pointed out that the term ‘carbon tax’ is often used to describe the pricing of carbon emissions. However, they asserted that this has nothing to do with the concept of taxation as it is understood in a constitutional context,” reads the summary of the judgment.
