12 Bank of Canada Governor admits the carbon tax is adding to inflation. (twitter.com) PP posted 2 years ago by Ham_Sandwich77 2 years ago by Ham_Sandwich77 +13 / -1 4 comments share 4 comments share save hide report block hide replies
The governor may be causing confusion here. Had all carbon pricing been eliminated in Jan, then yes. Had all carbon pricing never existed in the first place, then no.
Important to remember: Inflation is year-over-year changes in the CPI.
Some more on this for the nerds out there:
Jan 2021 CPI was 138.2.
Jan 2022 CPI was 145.3.
(145.3 / 138.2) - 1 = .051 << that's than annual inflation number.
Governor is saying that is if we removed the carbon tax from everything in Jan 2022 (like magically disappeared), then the CPI would be 144.7.
(144.7 / 138.2) - 1 = .047 << that's the counter factual inflation number if removed in Jan 2022.
But like, removing the carbon tax would be a one-time reduction in prices. It wouldn’t really affect the next month’s inflation rate.