Removing the goods and services tax from residential energy bills would save Canadian households an average of $117 and cost Ottawa $1.5 billion annually, according to a new report from Canada’s fiscal watchdog.

The report from the Parliamentary Budget Officer (PBO) released today found removing the goods and services tax (GST) from energy bills would ultimately cost federal coffers $1.52 billion if it was done in 2019-20. Another $111 million in revenue would also be lost annually by 2025.

The Conservatives pledged in March to remove the GST from all home heating bills.

The estimated average household savings vary by province, with Atlantic provinces saving $117 to $156 in 2019. Quebec households would save $90, while homes in Ontario would save $70. Alberta households would save $72, and British Columbia households $78.

Taking the GST off home energy costs in the territories, meanwhile, would result in $184 in household savings.

The savings do not reflect existing rebates on residential energy use, such as Ontario’s rebate on the provincial portion of the harmonized sales tax on electricity consumption. The PBO also noted that the savings would largely depend on residential energy mix.

The GST is a five per cent sales tax that, in some provinces, is combined with provincial sales taxes to form the harmonized sales tax (HST). The taxes apply to all the residential energy uses.

Canadian households use a variety of electricity, natural gas and oil, and wood sources for their energy needs, usually depending on where they live.

The report was in response to an April 11 motion by Conservative MP Bernard Généreux asking the federal government to acknowledge the costs of heating a home and to take steps to remove the GST from home energy bills.

The motion also asks Ottawa to repeal the carbon tax and recognize that basic groceries, used residential housing and residential rental accommodation are already zero-rated, or exempt, from the GST.

In a statement, a spokesperson for Finance Minister Bill Morneau said the Conservatives “would spend billions on a policy that would disproportionately help wealthy Canadians with the largest homes.”

“At the same time, they are refusing to tell Canadians how they plan to pay for it,” said press secretary Pierre-Olivier Herbert. “It’s middle class Canadians who foot the bill.”

The PBO’s estimates also do not account for potential payments from the federal government to certain provinces for loss in HST revenues.

The costing was done using data from the National Energy Board, Natural Resources Canada and the Canada Revenue Agency.

Clarification: The PBO updated its revenue figures following the publishing of this story. It has since been changed to reflect that.