Trudeau Rejects Calls for Further Carbon Tax Exemptions

The prime minister says there will be ‘absolutely’ no exemptions to the federal carbon tax policy other than the three-year pause on home heating oil.

Prime Minister Justin Trudeau makes an announcement about the carbon tax during a news conference in Ottawa on Oct. 26, 2023. The Canadian Press/Sean Kilpatrick

Prime Minister Justin Trudeau says he’s not considering other exemptions to his carbon tax after announcing a three-year pause on heating oil.

“There will absolutely not be any other carve-outs or suspensions of the price on pollution,” he told reporters on Oct. 31. “This is designed to phase out heating oil.”

The prime minister said the move targets this type of fuel because it is more expensive, creates more emissions, and impacts the more vulnerable.

Heating oil is used more predominantly in Atlantic provinces and Liberal MPs from those ridings have been complaining about how the carbon tax disproportionately impacts their constituents.

“We’ve heard clearly from Atlantic Canadians through our amazing Atlantic MPs that since the federal pollution price came into force ... certain features of that pollution price needed adjusting to work for everyone,” said Mr. Trudeau in announcing the measure on Oct. 26.

The carbon tax adds more than 17 cents to a litre of heating oil in most provinces, and Ottawa wants to raise it to more than 45 cents a litre by 2030.

The new measure also includes subsidies to replace furnaces with heat pumps and a top-up in climate incentive payments for Canadians living in rural areas.

The move has been met with criticism by provincial premiers and the political opposition in Ottawa.

Saskatchewan Premier Scott Moe said he would stop collecting the carbon tax if the exemption is not extended to his province, where residents mostly heat with natural gas.

Alberta Premier Danielle Smith said she was “disturbed” that Albertans would not benefit from the carbon tax pause.

“What a terrible message this sends about how dysfunctional and divisive Ottawa has become,” she said on social media on Oct. 26.

This theme of divisiveness was also echoed in the House of Commons, with opposition party leaders raising the issue.

Conservative Leader Pierre Poilievre asked during question period on Oct. 31 if Mr. Trudeau realizes “what he is doing is not just bankrupting Canadian households, 14 percent of whom are living with unsafe temperatures because of higher energy costs, but he’s actually tearing our national unity apart.”

Mr. Poilievre cited data from an Oct. 30 Statistics Canada survey indicating that in the face of rising energy prices, “not all Canadian households are able to adequately heat and cool their dwellings, resulting in possible increased risk of climate-related morbidity and even death.”

Mr. Trudeau responded that Conservatives are spreading “misinformation” and that eight Canadians out of 10 receive more money back from the carbon tax. “That is what the leader of the opposition refuses to recognize,” he said.

The Parliamentary Budget Officer has assessed that a majority of households will suffer a net loss from the carbon tax.

Mr. Poilievre suggested Mr. Trudeau call an election over the carbon tax to let Canadians decide.

“After the summer we’ve had [Conservatives] continue to say no plan against climate change is what’s good for Canadians, good for our economy, good for businesses. They are wrong, and Canadians are going to show them that once again,” replied the prime minister.

NDP Leader Jagmeet Singh also said during question period that the prime minister is “delivering a program that divides the country.”

“The announcement on home heating is cynical and divisive,” said Mr. Singh, alleging the Liberals only want to help a region where they’re losing political ground. He said the NDP has long called for the removal of the GST on all home heating to help all Canadians.

Bank of Canada Governor Tiff Macklem told a House of Commons committee on Oct. 3o that the carbon tax contributes to 16 percent of inflation, which is currently at 3.8 percent.