Carney Ends Consumer Carbon Tax Shortly After Taking Office as PM

Mark Carney addresses the media, with his cabinet in the background, shortly after being sworn in as Canada’s 24th prime minister in Ottawa on March 14, 2025. Minas Panagiotakis/Getty Images

Mark Carney has signed a directive for the consumer carbon tax rate to be cut to zero.

“Consistent with the promise that I made and others supported during the leadership campaign, we will be eliminating the Canada fuel charge, the consumer fuel charge, immediately,” Carney said following a cabinet meeting on March 14.

The directive will cut the rate of the consumer carbon tax to zero on April 1, which was also the date the tax was set to rise by another $15 to $95 per tonne of greenhouse gas emissions. Carney added that his government would ensure the Canada Carbon Rebate cheques are delivered to Canadians before the end of April.

Carney said this move would “make a difference to hard-pressed Canadians,” but was also part of his government’s larger plan to bring climate change policies while ensuring Canadian companies remain competitive.

During the Liberal leadership campaign, Carney had pledged to end the consumer carbon tax and replace it with a system that rewarded Canadians for making greener choices like buying electric vehicles, heat pumps, and energy-efficient appliances.

To pay for this, Carney said he would develop a new “consumer carbon credit market” and make sure “big polluters pay.”

The carbon tax came into effect in 2019 at $20 per tonne, and was set to slowly increase until reaching $170 per tonne in 2030, as a way of incentivizing Canadians and businesses to transition to greener forms of energy and lower carbon emissions. The policy proved to be a controversial one, with a majority of Canadians eventually being opposed to it.

The Conservative Party has been highly critical of the carbon tax, repeatedly arguing the policy makes food, fuel, and home heating more expensive, and calling for an “Axe the Tax” federal election.

The Conservatives say passing on higher costs to large businesses will impact consumers as businesses pass on the costs to the consumers and farmers, calling Carney’s policy a “shadow carbon tax.”

During a press conference on March 14, Conservative Leader Pierre Poilievre said Carney was planning to get rid of the carbon levy for 60 days, and then “bring it back bigger than ever, with no rebate.”

Poilievre also said Carney could not completely abolish the consumer carbon tax without recalling Parliament, and said the policy remains the “law of the land” until then.

“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,” he said.

Parliament was prorogued until March 24 at the request of then-Prime Minister Justin Trudeau on Jan. 6, the day he announced his plan to resign as prime minister.

Emissions Policy

Carney, a former central banker, was the U.N. special envoy on climate action and finance before becoming a candidate in the Liberal leadership race in January. As part of this role, he helped create the Net Zero Banking Alliance, which commits member financial institutes to align their lending and investment decisions with “net-zero greenhouse gas emissions by 2050.”

During the Liberal leadership campaign, Carney referred to the “current climate policy” of the Trudeau government as “too divisive,” and said he would bring in a new “climate policy that is unifying, credible, and predictable.”

Besides his plan to provide incentives and subsidies for Canadians to reduce their “carbon footprint,” he said he would bring in new systems and mechanisms to help achieve net-zero emissions.

This includes improving some of the existing systems that deal with putting a price on emissions on industrial players, but also introducing new mechanisms, his platform said.