Prime Minister Mark Carney’s first move after taking office on Friday, March 14, was to eliminate the consumer carbon price, undoing Justin Trudeau’s signature climate policy.
Carney addressed members of the media after the Friday afternoon cabinet meeting, saying the government is “focused on action.”
“We will be eliminating the Canada fuel charge, the consumer fuel charge, immediately, immediately,” he said.
The order-in-council Carney signed in front of cabinet ministers and the press actually stipulates that “the fuel charge be removed as of April 1, 2025.”
That’s when the price was scheduled to rise again. Instead, it will be eliminated for consumer purchases.
The price for big industrial emitters remains in place.
Will Canadians get another carbon rebate payment?
Carney also said people who have been getting rebates on the carbon price will get one final payment for the next quarter in April.
Carney had pledged to end the consumer price during the Liberal leadership race and said he would bolster the industrial price paid by big polluters.
Agriculture Minister Kody Blois said he thinks “it’s a really good move” because the policy has become very divisive.
He noted the Atlantic Liberal caucus had pushed for changes to the carbon price in the past, and secured a carve-out for home heating oil in 2023.
Why Canada is ending the consumer price on carbon
The consumer carbon pricing policy had been the focus of Conservative attacks on the Liberals for more than two years and had become a symbol of Canadians’ struggles with the high cost of living.
Conservative Leader Pierre Poilievre, whose rallying cry of “axe the tax” had him riding high in the polls until about six weeks ago, claimed on Friday that Carney can’t really abolish the carbon price without recalling Parliament to repeal the law.
“What he might do is hide the carbon tax by telling (the Canada Revenue Agency) to stop collecting it for two months before the election,” Poilievre said, brandishing a copy of the law at a press conference in Ottawa.
He asked reporters whether they really believe Carney’s cabinet ministers, who have voted in favour of the carbon price for years, will actually end the policy. He suggested the Liberals would bring it back “two days after the election.”
The government is able to end the consumer carbon price without repealing or amending the law.
The Greenhouse Gas Pollution Pricing Act, which was passed in 2019, sets out a framework for both the consumer carbon price and the industrial price.
The law allows the fuel price to be set by regulation, which means cabinet can set the price through an order-in-council, as it did Friday.
The federal government initially set a minimum price on carbon pollution of $20 per tonne, which rose annually. It was set to rise another $15 per tonne in April to $95.
Will it impact Canadians’ finances?
Eliminating the charge will reduce the cost of a litre of gasoline by 17.6 cents, and reduce the cost a cubic metre of natural gas by a little more than 15 cents.
The federal government was not keeping any of the money collected through the consumer carbon price. It was being sent directly to people through the Canada Carbon Rebate, and returned to territorial or Indigenous governments or businesses and non-profit organizations.
Steven Guilbeault, who was Trudeau’s environment minister and a staunch supporter of the carbon price, was named minister of Canadian culture and identity and Carney’s Quebec lieutenant on Friday.
He told reporters the industrial price “gives us three times more emission reduction than the consumer portion of carbon pricing.”
The Liberals have insisted the carbon price is sound policy that was plagued by poor communication and Conservative attacks.
Greenpeace Canada’s senior energy strategist Keith Stewart said in a statement on Friday that Poilievre had “successfully poisoned the well on consumer carbon tax by spreading false information.”
He added that the industrial carbon price was the source of the bulk of carbon pollution reductions in Canada.
“We are pleased to see that our new prime minister has promised to strengthen it and call on him to maintain and strengthen other key climate and biodiversity protection policies,” Stewart said.
Poilievre has pledged that a Conservative government would end the consumer carbon price. He has not said what he would do with the industrial price. Last week, he told reporters they would have to wait until the election campaign begins to see detailed policies.
He has said “axe the tax” will continue to be part of his message to Canadians in the next election.
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