The Parliamentary Budget Officer released his latest economic and fiscal outlook yesterday, which included some not unexpected things like warnings that the deficit might be larger than anticipated, or that debt servicing charges might start to increase, or that some government programmes may wind up costing more than stated in the budget. All fair game. But it was his analysis of the federal carbon price that really go the Conservatives (and their mouthpieces) excited – and as usual, it was an exercise in cherry-picked numbers that ignored the context of what was actually said.

Parliamentary Budget Officer calculates the Liberal carbon tax will reduce GDP by $10 billion/year by 2022. https://t.co/FUsaUKmZMF

— Pierre Poilievre (@PierrePoilievre) April 23, 2018

In this particular case, the headline number was that by 2022, when the full $50/tonne price is implemented, the price could – and one has to stress could– cost the economy 0.5 percent of GDP, or $10 billion. And this had the Conservatives, and Pierre Polievere in particular, whooping at the government about how this was going to kill the economy. The problem is that the report goes on to say that if provincial governments actually recycle those revenues through reducing corporate or personal income taxes, for example, it would nullify that effect. Not that things like context or nuance, or even truth will dissuade a political talking point. University of Calgary economist Trevor Tombe explains more here:

Also, the effect on GDP of using regulations and technology subsidies to achieve an equivalent emissions reduction will come at a *larger* cost. If CPC opposes pricing, they're implicitly preferring more than 0.45% in costs since they agree with the target.

— Trevor Tombe (@trevortombe) April 23, 2018

Paging @kirst_nicole. Despite the #kirstengraphs nature of this graph, the absolute gap is also larger than most other estimates I've seen. Wonder what's different. @enviroeconomics? pic.twitter.com/GvhAKKhRCO

— Andrew Leach (@andrew_leach) April 23, 2018

Yes, seeing that now. I first read it as 0.5% lower gdp growth, which led me to believe maybe they weren't recycling revenues or something. Thanks.

— Andrew Leach (@andrew_leach) April 23, 2018

Digging deeper into the footnotes, the PBO didn't construct their own estimates, they just used the results in 'Choose Wisely' and scaled up the effect of moving to $50.

— Trevor Tombe (@trevortombe) April 23, 2018

Also in the PBO report: recycling carbon revenues by reducing income taxes "would essentially offset the impact of the carbon levy on the Canadian economy in 2022." #cdnpoli

— Trevor Tombe (@trevortombe) April 23, 2018

1) They're using estimates from @EcofiscalCanada. So, not new.

2) Using CTax rev to lower income taxes, "would essentially offset the impact on #cdnecon". To ~0.1% instead of 0.45%.

3) Regulations and tech subsidies (your preferred tools) tend to have *higher* costs. https://t.co/5tpoVSYfcI

— Trevor Tombe (@trevortombe) April 23, 2018

Tombe also found this bit of the report overlooked by other media reports:

PBO also releasing updated estimate of TPP+CETA https://t.co/k2Qg8fpcuw Fully phased-in, the two deals are a ~$1.8-1.9 billion tax cut affecting 23% of #cdnecon imports.

— Trevor Tombe (@trevortombe) April 23, 2018

Good reads:

• Ralph Goodale says there is nothing in the Toronto attack to suggest radicalization or other national security threats.
• Liberals on the public safety committee appear to be rejecting most opposition amendments to the national security bill, while entertaining friendly ones.
• Bell and Rogers have been quietly meeting with the ministers of public safety and industry about the SS7 vulnerability in mobile networks.
• The Canadian royal family has a new prince, born to William and Kate.
• An American judge gave conditional approval to the Enbridge Line 3 replacement pipeline.
• Liberal MP Francis Drouin remains in caucus while he is being investigation for what sounds like an alleged groping incident.
• Liberal backbenchers remind themselves of the necessity of door knocking if they want to keep their seats.
• The NDP plan to use their upcoming Supply Day motion to debate and vote on demanding a papal apology for residential schools.
• Saskatchewan introduced their own dubiously constitutional bill to control oil and gas exports that mimics Alberta’s Bill 12.
• Kady O’Malley’s Process Nerd column looks at the state of the amendments to the national security bill at committee.
• Chantal Hébert says that the policies coming out of the Liberal convention show their election strategy of co-opting NDP voters.
• Andrew Coyne says the government may be willing to take a pass on universal pharmacare because of the size of the insurance industry and other problems.

Odds and ends:

I missed this from last week, but here’s Scott Brison talking about his process of coming out, and how that impacted his political career.

Former Conservative minister Keith Ashfield passed away on the weekend.

This morning, Blacklock’s (@mindingottawa) posted an article containing an unfounded and untrue suggestion that I acted improperly.
Full facts can be found at this Canadaland story:https://t.co/yoKfTSoCAo
I invite Blacklock's to remove the piece and apologize. pic.twitter.com/DfYPgh6HmL

— Dale Smith (@journo_dale) April 23, 2018

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