Carbon Tax ‘Absolutely Gone’ but No Plan to Strike Its Legislation: Gov’t House Leader

Leader of the Government in the House of Commons Steven MacKinnon in a file photo. The Canadian Press/Justin Tang

Government House Leader Steven MacKinnon says the consumer carbon tax is “absolutely gone” for good, but there is currently no plan to remove the tax by way of legislation.

“There are a lot of laws on the books that either aren’t applied anymore or are simply ignored, maybe even forgotten, but the carbon tax is absolutely gone, and we'll make sure that that’s made very clear to Canadians in due course,” MacKinnon told CTV News in an interview aired on May 25.

MacKinnon, whose role includes setting the government’s agenda in the House of Commons and tabling legislation, was giving a preview of the Liberals’ priorities at the beginning of the new Parliament.

As the first order of business, the minority Liberals intend to table a motion to implement a federal income tax cut before July 1. MacKinnon said he would be “very surprised” if the measure faces opposition from other parties.

Prime Minister Mark Carney promised during the election campaign to drop the tax rate for the lowest income bracket by 1 percent. The Tories had pledged a larger tax cut of 2.25 percent.

Carney also said Ottawa would work to bring down internal trade barriers between provinces and territories by Canada Day. MacKinnon said this would also be a legislative priority of his government.

Asked about the removal of the carbon tax by way of an act of Parliament, MacKinnon did not provide a timeline.

“Look, that will have to be done eventually,” he said, calling the tax a “latent” piece of legislation. “We have no intention of returning the carbon tax. It is not part of the climate change policy mix for this government.”

Carney signed a directive to set the fuel charge rate to zero on his first day in office on March 14. Carney has been a strong advocate of carbon taxes, but had promised to cancel the fuel charge during the Liberal leadership campaign, saying it had become too “divisive” among Canadians.

Tory Leader Pierre Poilievre had long called for the removal of the carbon tax, saying it makes Canadians poorer by raising the cost of essential items such as food and fuel.

There was a marked drop in inflation in April after the fuel charge was removed, going from 2.3 percent to 1.7 percent. The Bank of Canada had predicted a temporary 30 percent drop in inflation after the fuel charge’s removal.

While Carney has set the fuel charge rate to zero, he said he would compensate the loss in emissions reduction by making the industrial carbon tax more stringent. His election platform also pledged to implement a carbon border adjustment mechanism, a form of tariffs on foreign goods high in carbon to protect the domestic industry impacted by local climate change policies.

Carney described himself as a “pragmatist” during the election campaign, and has not shut the door on the oil and gas sector since his election win on April 28.

Carney said he supports building new pipelines if there is a “consensus,” and said policies like the emissions cap on oil and gas and the Impact Assessment Act, which scrutinizes the development of new major projects, could be modified to help the economy.

House Leader MacKinnon said he didn’t have much to add on the topic regarding potential bills to bring changes to these policies, but that the “intention is clear.” He said to pay attention to what Carney is saying and to the speech from the new energy minister.

In his single mandate letter to his ministers, Carney mentioned making Canada an “energy superpower in both clean and conventional energies.”

Newly appointed Natural Resources Minister Tim Hodgson, a former chair of Hydro One utilities company, gave an outline of that objective during a talk in Calgary last week.

“We need infrastructure that gets our energy to tidewater and to trusted allies,” he said. Hodgson also said he is committed to a “clean slate” with Alberta, Canada’s leading oil-producing province.

Alberta’s government under Premier Danielle Smith has had a tense relationship with Ottawa in recent years over its energy and climate policies. Smith announced earlier this month the province would freeze indefinitely its federal-backstopped industrial carbon price, saying the price for businesses has become “too high to bear” amid a challenging economic landscape.

Jennifer Cowan and Carolina Avendano contributed to this report.