Prime Minister Justin Trudeau speaks with reporters as he makes his way to Question Period in Ottawa on Oct. 31, 2023.Adrian Wyld/The Canadian Press
The federal government on Tuesday rejected calls for more carbon price concessions, saying its carve-out aimed at improving home heating oil affordability won’t be extended to households who use other fuels to heat their homes.
Prime Minister Justin Trudeau and his top ministers on the file attempted to shut down growing calls for more changes to the minority government’s emissions reduction policies as Liberal heavyweights and a leading business group said the government made a mistake with its carbon price reversal last week.
“There will absolutely not be any other carve-outs or suspensions of the price on pollution,” Mr. Trudeau told reporters on his way into Question Period on Parliament Hill Tuesday.
Last week the Prime Minister exempted home-heating fuel from the levy, prompting accusations that Ottawa has implemented a two-tier carbon pricing system that advantages voters in Atlantic Canada, a Liberal stronghold, while disadvantaging others.
Home-heating oil has more emissions than natural gas but oil is disproportionately used on the East Coast. Conversely the vast majority of households in provinces like Saskatchewan use natural gas.
Heating oil being delivered to a home in Vermont in 2008.AFP/Getty Images
Mr. Trudeau’s comments came on the heals of similar declarations from the ministers responsible for the file earlier in the day. “There will be no more carve-outs,” said Natural Resources Minister Jonathan Wilkinson outside of cabinet.
Separately Environment Minister Steven Guilbeault told The Globe “we won’t be creating other exemptions to carbon pricing.”
On Monday, Saskatchewan Premier Scott Moe threatened to stop collecting fees from the carbon price applied to natural gas, saying Ottawa’s exemption for heating oil has excluded his province and created “two classes of taxpayers.”
Mr. Moe’s threat Monday ratcheted up the pressure on Mr. Trudeau to drop the carbon levy from all heating fuels.
Asked about Saskatchewan’s new position, Mr. Wilkinson said the premier’s new policy position isn’t allowed under the law.
“We expect him to comply with the laws of the land,” the Minister said. “It is a requirement that they collect that or that it be collected in some way.”
Mr. Guilbeault meantime said the home-heating oil exemption is due to a “very particular situation.”
“There’s a number of factors that were taken into account: the price of home-heating oil has climbed three times faster than than natural gas, it’s less efficient, it’s more polluting.”
He also rejected criticisms from many climate policy experts and business groups that last week’s climb down undercuts the government’s climate policies.
“Some people have said that this would slow down our fight against climate change, quite the opposite. We’re accelerating it. We will be taking out of Canadian residences home-heating oil faster than we would have otherwise.”
He added that home-heating oil accounts for about 1 per cent of Canada’s emissions, meaning that almost all of the country’s emissions are covered by the carbon price, and that will remain unchanged.
NDP Leader Jagmeet Singh told reporters on the Hill Tuesday that his party believes that home heating should be exempt from federal sales tax, rather than getting partial carve outs under the carbon price.
“The Liberal government’s approach is one that divides the country and provides help to those that live in ridings where the Liberals are worried about losing their seats and doesn’t provide help across the country,” Mr. Singh said.
“Justin Trudeau thought he could just do this and no one would notice how unfair it was. It just shows how out of touch Justin Trudeau is.”
The New Democrat leader defended his suggested policy of a GST exemption, saying it is in line with other exemptions for essential items.
Despite the call to lift the GST on home-heating fuels, Mr. Singh said his party is also standing by its demand the government end fossil fuel subsidies to oil and gas companies.
“To give Canadians a break is very different from giving oil and gas companies a direct subsidy,” he said.
The furor over the minority government’s climate policy changes comes amid back-to-back climate summits in Ottawa featuring Liberal heavyweights, like former Bank of Canada governor Mark Carney and former Environment Minister Catherine McKenna.
At a Tuesday morning speech, Mr. Carney pressed Canada to stick with predictable climate policy and he questioned the federal government’s move to lift the carbon price on home-heating oil.
“Many Canadians are struggling. They’re struggling not because of the carbon tax, which gets rebated, they’re struggling because of broad increases in energy prices and food prices, the impact on wages ... the lingering effects of COVID as well,” Mr. Carney said during a question-and-answer session at the conference.
“I would have looked for other ways to provide that support than the route chosen, not least because what is important is that clarity in terms of the overall plan, the overall direction. Because that certainty helps to incentivize change, so you can provide support here, but keep this certainty there.”
The former central banker, who has long been rumoured to be a possible future Liberal leadership candidate, also said no other government or prime minister in Canadian history has done more on climate and he applauded the moves to help households transition to greener heating alternatives.
His concerns about having policy certainty were echoed by Canada’s leading business lobby. The signal sent to the Canadian public and businesses with the carve-out for home heating oil “will have severe ramifications on the future of Canada’s carbon pricing regime,” said Robert Asselin, senior vice-president of the Business Council of Canada.
“Once it has been subject to arbitrary exemptions, the policy instrument will no longer be effective.”
With a report from the Canadian Press.
Ottawa rejects premiers' calls for more carbon price exemptions - The Globe and Mail
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