Environment Minister Steven Guilbeault speaks at a news conference in Pickering, Ont., on Jan. 27.Sammy Kogan/The Globe and Mail
Environment Minister Steven Guilbeault is looking into options to stop the legislated April 1 increase to the consumer carbon price in light of newly elected Liberal Leader Mark Carney’s promise to scrap the program altogether.
Mr. Carney reiterated that pledge Monday after his landslide victory in a contest that saw three of four candidates saying they’d get rid of the carbon pricing policy.
“My government will immediately eliminate the divisive consumer carbon tax on families, farmers, and small and medium-sized businesses,” he said.
The federal price on carbon, which the government refers to as the fuel charge, is set to rise from $80 a tonne to $95 a tonne on April 1 for provinces without their own program. By 2030, the price per tonne is supposed to hit $170.
That means, for example, that as of April 1, the fuel charge on a litre of gasoline would go from 17.61 cents now to 20.91 cents. The goal of the carbon pricing program, implemented in 2019, was to incentivize people to reduce their use of carbon-intensive products. Most of the proceeds from the levy are returned to Canadians in a rebate cheque.
The program was a central feature of Prime Minister Justin Trudeau’s climate plan, but national support for it cratered under pressure from Conservative Leader Pierre Poilievre. He led a sustained campaign to “axe the tax,” blaming it for the rising cost of living in Canada.
During the Liberal leadership race, Mr. Carney, as well as candidates Chrystia Freeland and Frank Baylis, promised to end consumer carbon pricing. Karina Gould said she would pause the annual increases but keep the system in place.
Mr. Guilbeault, who endorsed Mr. Carney for leader, said he is reviewing the mechanics required to to fulfill Mr. Carney’s promise.
“We have to look at exactly what can be done in the time that we have between now and April 1,” he told reporters on his way into a Liberal caucus meeting Monday.
“But clearly, with what Mr. Carney said yesterday, this is something that I am looking into.” He declined to put a timeline on when a decision would be made.
To alter the carbon pricing program, the government could repeal the legislation used to set it up or use regulations to simply set the price at zero. The government took the regulatory route in 2023 when it paused implementation of the carbon price on home heating fuel.
Saskatchewan Premier Scott Moe said ending the tax was a “day one” priority for his province and called for Mr. Carney to follow through.
“It would be a great tariff relief measure and needs to happen before the carbon tax increases again on April 1,” Mr. Moe wrote on social media, in reference to the continuing Canada-U.S. trade war.
During the leadership campaign, Mr. Carney said he would replace the carbon price with incentives for people to make “greener choices,” and also cut taxes for the middle class given that ending carbon pricing would also end the rebate.
He also said he’d strengthen the current industrial pricing system and implement a “carbon border adjustment mechanism,” which could see a fee on imports from countries that don’t have a carbon price or use one below a certain benchmark.
Mr. Poilievre has accused Mr. Carney – through those proposals – of trying to implement more carbon taxes at a time when the economy can’t afford them.
“We are going to have a carbon tax election because Mark Carney has proposed to add another industrial carbon tax on top of the existing one,” Mr. Poilievre told reporters Monday. He has yet to say whether he’d keep the industrial pricing program.
B.C. Premier David Eby, whose province does not fall under the federal backstop, lamented the politicization of the policy.
“I think it’s unfortunate that a policy that existed between governments for a long time in B.C. – a successful policy in driving down our carbon pollution that had support, ultimately, on both sides of the legislature – was politicized and accelerated in the face of a cost-of-living crisis, in a way that cost public support across the political spectrum for it,” Mr. Eby said.
“With that said, we made an unambiguous commitment to British Columbians that we will get rid of that carbon tax. We will move as quickly as we can following the removal of the federal law that requires us to have it in place.”
Parliament is prorogued until March 24, so any legislation would have to wait until after that date, But, Mr. Carney is expected to call an election within the next several days.
With a report from Andrea Woo