Report

A Distributional Analysis of the Clean Fuel Regulations

May 18, 2023

This report provides a distributional analysis of the Clean Fuel Regulations that will require reductions in the carbon intensity of gasoline and diesel used in Canada.

Supplementary Data (xlsx)
Supplementary Data

Highlights

Relative to household disposable income, PBO results show that the Clean Fuel Regulations are broadly regressive. That is, the cost to lower income households represents a larger share of their disposable income compared to higher income households.
At the national level, in 2030, the cost of the Clean Fuel Regulations to households ranges from 0.62 per cent of disposable income (or $231) for lower income households to 0.35 per cent of disposable income (or $1,008) for higher income households.
Relative to disposable income, the cost of the Clean Fuel Regulations to the average household in 2030 is the highest in Saskatchewan (0.87 per cent, or $1,117), Alberta (0.80 per cent, or $1,157) and Newfoundland and Labrador (0.80 per cent, or $850), reflecting the higher fossil fuel intensity of their economies.
Relative to disposable income, the cost of the Clean Fuel Regulations to the average household in 2030 is the lowest in British Columbia (0.28 per cent, or $384), reflecting the relatively muted impact on real GDP. That said, the cost to the average household in Ontario (0.35 per cent, or $495) and Quebec (0.39 per cent, or $436) is only modestly larger.
PBO estimates are based, in part, on data underlying the Regulatory Impact Analysis Statement provided by Environment and Climate Change Canada from their upper bound fuel price scenario. Consequently, PBO estimates should be regarded as upper bound estimates.