Sask. government's carbon tax study analysis 'didn't pass most basic of sniff tests': economist

An economist who worked on a carbon tax study the Saskatchewan government chose not to release says he's "100 per cent" certain the carbon tax will not lead to another Great Depression in the province.

That contradicts a claim made by the Saskatchewan Party government last year.

Jotham Peters is the director of Navius Research and one of the authors of a carbon tax study the firm was commissioned to produce for the province.

The government instead released a different study by the University of Regina, saying it had concerns with the methodology of the Navius study.

Navius concluded the carbon tax will cost the Saskatchewan economy about $1 billion by 2030.

The U of R study pegged it at about $16 billion.

It's like asking someone what one plus one is and getting an answer of 37.- Jotham Peters

Peters told The Morning Edition host Stefani Langenegger the government made two separate errors when it said the carbon tax would put the province in a recession on the scale of the Great Depression.

Peters said the government confused a change in GDP in the future with a change in economic growth.

"Which is incorrect," he said. "So therefore they inflated the impacts by an order of magnitude of around 5."

He also said the U of R's study reported two separate things that are inconsistent with each other.

Peters said that study pegs a 2.43 per cent decrease in GDP by 2022, but that number doesn't align with how the study said each individual component of GDP would change in response to a carbon tax.

"None of those components changed by anywhere close to 2.43 per cent," he said. "So if the components don't change by anywhere close to 2.43 per cent, then your total is impossible, almost impossible, for your total to change 2.43 per cent."

Peters said the expected increase to the cost of gasoline doesn't match the government's forecast.

He said the projected carbon tax in 2022 would increase the price of gas by about 12 cents per litre.

"So it's kind of the change that you see on a May long weekend or an August long weekend, et cetera," he said. "And in response to that, they're showing a recession on the order of magnitude of the Great Depression.

"I think that people need to know that the carbon tax will not lead to another Great Depression in Saskatchewan."

Peters said he was surprised the government's release "didn't pass the most basic of sniff tests."

"What frustrated me I think more than anything else was digging into the press release and then the University of Regina's report and seeing the magnitude of the errors," he said.

"Just to put the error into perspective, it's like asking someone what one plus one is and getting an answer of 37. So it's a huge error."

Environment Minister Dustin Duncan said both studies show the carbon tax would cause economic harm to the province.