The BoC governor says inflation would drop 16 percent if Ottawa was to remove its carbon tax altogether.

If the Liberal government were to abandon the carbon tax entirely, inflation in Canada would drop 16 percent, says Bank of Canada governor Tiff Macklem.

Mr. Macklem provided this information while testifying before the House of Commons finance committee on Oct. 30.

“That would create a one-time drop in inflation of 0.6 percentage points,” said Mr. Macklem in response to a question from Conservative MP Philip Lawrence. Inflation is currently at 3.8 percent in Canada.

Mr. Macklem was visiting the committee to discuss the central bank’s latest policy decision to hold its overnight rate at 5 percent.

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