Desjardins’ analysis also predicts the price of natural gas will fall 12.8 per cent between March and April.
The federal consumer carbon price is active in all provinces and territories but British Columbia, Quebec and Northwest Territories, which had equivalent systems of their own. B.C. announced plans to kill its provincial consumer carbon price in the wake of Carney’s announcement.
The consumer levy is charged on the purchase of more than two dozen input fuels including gasoline, natural gas, propane and coal. The amount of the charge is based on the greenhouse gas emissions of each when burned, sitting at $85 per tonne currently.
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The carbon tax and Canada’s inflation rate
Desjardins forecasts that Canadians will see inflation cool more gradually at the grocery store as lower transportation costs tied to the end of consumer price on pollution filter down to the cost of food.
RSM economist Tu Nguyen said just as the consumer carbon price took time to ramp up, it may take a while for Canadians to see the impact of its absence in the prices they pay.
Gasoline prices, for example, depend not only on government tax policy but on prices set globally, which are also affected by shifting levels of demand and interruptions to production.
“Those factors are likely to have a bigger impact overall on gas prices than the carbon tax,” Nguyen said.
The Desjardins report projects that, in the absence of federal consumer carbon pricing, inflation in April will be 0.7 per cent lower than it would have been otherwise.