The government’s carbon pricing plan will cause the GDP to drop, according to the Parliamentary Budget Officer’s (PBO) latest report, costing Canadians $10 billion they would otherwise have gained by 2022.

That’s the latest from the PBO’s Economic and Fiscal Outlook for 2018, which was released Monday morning. The report warns that the levy will “generate a headwind” for the economy as the price on carbon is boosted from $10 per tonne of CO2 in 2018 to $50 per tonne in 2022. While a headwind might be nice on a hot day, in economic terms, headwinds aren’t a good thing.

In this case, it refers to the fact that with a carbon pricing plan in place, the GDP will be 0.5 per cent lower than it would be if the feds didn’t put in place their planned levy. The PBO’s findings are based on the Ecofiscal Commission’s analysis, conducted in 2016.

While she has yet to respond to a request for comment from iPolitics, Environment Minister Catherine McKenna stood firmly behind her proposed levy on Sunday.

“We know polluting isn’t free — there is a cost,” she said.

Not everyone is behind the planned federal levy.

Conservative Environment Critic Ed Fast, a staunch opponent of the carbon pricing plan, said he wasn’t surprised by the report’s findings.

“The PBO report simply confirms what we have been saying for a long time, that the carbon tax is going to undermine economic growth in Canada,” Fast said.

“It’s pretty clear that the trend line is going down, down, down. So over the next two years, as the carbon tax (is implemented), that problem is going to be exacerbated.”

There are ways, however, for the government to mitigate the projected impact of its carbon pricing plan. Given that the levy is forecasted to generate significant revenues over the medium term, the report says “the impact on the economy will depend on how those revenues are used.”

The PBO assumes that federal revenues from the carbon tax will be returned to the provinces and territories, who will then transfer the funds to households. If the regions shift their approach and instead “undertake more efficient revenue recycling, such as reducing corporate or personal income taxes,” the report says the impact of the price on carbon would be “significantly lower.”

For Fast, however, there is another concern about the government’s carbon levy — the question of whether it actually works.

“Canadians have made the assumption that when a carbon tax is implemented, that will actually deliver significant reductions in greenhouse gases so that Canada can meet its Paris agreement targets,” Fast said.

“The reality is, the federal government has been asked numerous times…what will be the greenhouse gas emissions reductions if we implement a carbon tax of $50 per tonne. They have not given us answers other than to send us a fully redacted response.”

The government’s overall climate plan, the Pan-Canadian Framework on Clean Growth and Climate Change, projects that its measures — once implemented — will cause emissions will be reduced by 86 million tonnes.

McKenna said Sunday that she “will be releasing more information shortly.”

With files from the Canadian Press.