Trudeau Liberals feel the heat over carbon tax rollback

Natasha Bulowski
Local Journalism Initiative Reporter

Canada’s National Observer

The federal Conservatives and a lot of premiers are up in arms after Prime Minister Justin Trudeau announced a three-year pause on the carbon price for heating oil largely used in Atlantic Canada.

They argue Canadians who rely on natural gas to heat their homes in places like Alberta and Saskatchewan should also get a break. The demands for an exemption for natural gas used in home heating were accompanied by more widespread calls to eliminate the federal pollution pricing system altogether.

Conservative Party of Canada Leader Pierre Poilievre was quick to characterize Trudeau’s announcement as a “panicked flip-flop” on the federal carbon pricing regime, and Alberta Premier Danielle Smith and Saskatchewan Premier Scott Moe took to X, formerly known as Twitter, to pan the decision.

“Although I congratulate Atlantic Canadians for a well-deserved break from the carbon tax on home heating oil, I am frankly disturbed that same break will not be extended to Albertans and those from Saskatchewan and elsewhere in Canada who heat their homes with natural gas,” said Smith in a post on X on Oct. 26.

Moe’s video, also posted to X, called on the federal government to extend the exemption to all forms of home heating. “Hopefully, that exemption will be provided soon, but if not, effective Jan. 1, SaskEnergy will stop collecting and submitting the carbon tax on natural gas, effectively providing Saskatchewan residents with the very same exemption the federal government is giving heating oil,” said Moe.

“As a premier, I cannot accept the federal government giving an affordability break to people in one part of Canada but not here,” said Moe.

After the announcement last week, Smith, Moe, New Brunswick Premier Blaine Higgs, Nova Scotia Premier Tim Houston and Ontario Premier Doug Ford all issued statements calling for the carbon price to be scrapped altogether.

The Liberals are also catching heat from NDP MPs, including their leader Jagmeet Singh who said, “Last week’s announcement on home heating only benefits Canadians that live where Liberals need to save their seats” in question period on Oct. 30.

Nearly 30 per cent of households in Atlantic Canada now use home heating oil, compared to just eight per cent in the rest of Canada, according to the federal government. Although the policy change is targeted at Atlantic Canadians, it will apply to all Canadians in jurisdictions covered by the federal carbon pricing system who rely on this expensive fuel.

The federal government also increased the rural top-up to the carbon price rebate from 10 per cent to 20 per cent, another one of several changes a group of Atlantic MPs had demanded for months. These changes are paired with increased support to help Atlantic Canadians switch from oil to heat pumps by increasing federal grants for homeowners from $10,000 to $15,000 and introducing an upfront payment of $250 for low- to median-income households using heating oil to make the switch. The new supports will begin rolling out in Atlantic provinces that have agreed to joint federal-provincial delivery of the oil to heat pump affordability programs, with the potential to expand to other provinces and territories, according to the federal government.

In question period on Oct. 30, multiple Conservative MPs, including Poilievre, suggested Liberal MPs outside Atlantic Canada are “useless” for being unable to secure carbon pricing carveouts that benefit their constituents.

Conservative and NDP MPs homed in on comments Rural Economic Development Minister Gudie Hutchings made to CTV on Oct. 28 when asked whether similar exemptions for other regions are being considered.

“That’s a discussion that we’ll have down the road when we know that this one is working, but I can tell you, [the] Atlantic caucus was vocal with what they’ve heard from their constituents, and perhaps they need to elect more Liberals in the Prairies so that we can have that conversation, as well,” Hutchings said on CTV’s Question Period.

The Liberals currently hold 24 seats in the four Atlantic provinces, making it an important region for the party to shore up support as Poilievre leads in the polls. There are two Liberal MPs in Alberta, four in Manitoba and none in Saskatchewan.

In a joint statement, NDP MPs Laurel Collins and Charlie Angus called the federal government’s measures “a long-overdue reprieve” for Atlantic Canadians, but want to see relief provided to families all across the country struggling with affordability.

“The Liberals seem to be hand-picking who they help based on their own political interests, leaving families in northern Ontario, Alberta and other parts of the country behind,” said the joint statement.

Alberta’s Minister of Environment and Protected Areas Rebecca Schulz took issue with the exemption for Atlantic Canadians. Her letter to Environment Minister Steven Guilbeault cites previous comments he made stating it wouldn’t be fair to carve out exemptions for certain provinces. Guilbeault’s comments were in reference to the clean electricity regulations and at the time, he said the federal government “didn’t do it for pricing.”

By instituting a three-year pause on the carbon price for oil used to heat homes in Atlantic Canada, Trudeau “has just defined the issue of the next election,” Poilievre told MPs on Monday morning in the House of Commons.

Poilievre began the day with a speech pledging to “axe the tax for everyone and forever” before launching into the debate on his housing bill. Later in the day, question period was dominated by countless carbon tax questions from Conservative MPs, all of whom used a similar script. Quips about Trudeau finally admitting the carbon tax is unaffordable, calling Liberal MPs outside Atlantic Canada “ineffectual” for not getting home heating exemptions and saying the decision and Hutchings’ comments show that only Canadians who voted Liberal can get these carveouts.

For the most part, Natural Resources Minister Jonathan Wilkinson and Guilbeault fielded the carbon tax questions. They repeatedly responded with details of the heat pump support and the need to accelerate their deployment to help reduce planet-warming greenhouse gas emissions and lower Canadians’ energy bills, reiterated that the heating oil exemption applies across the country and highlighted the Conservative Party’s lack of a climate plan.

“Canadians who live in jurisdictions where the price on pollution applies get over $1,000 a year from the Government of Canada to fight climate change,” said Government House Leader Karina Gould, referring to the quarterly rebate called the Climate Action Incentive Payment.

“When it comes to the Conservatives, they want to take that $1,000 out of the pockets of Canadians,” said Gould.

NDP MP Taylor Bachrach said the Liberals seem to “care more about rural Canada when they hold seats there than they do about helping everyone across this country” and called for the government to commit to increasing the federal heat pump rebate for all Canadians.

Wilkinson’s answer to Bachrach’s question was, in short, “Yes.”

“There is an existing heat pump program across this country that provides grants of $10,000 [and] it actually enables people to get a cheque within three days. It applies just as much in British Columbia as it does in Newfoundland and Labrador,” Wilkinson responded. “Last week, we announced we were increasing that by another $5,000 so long as provinces actually step up to be part of the solution. So yes, the answer is yes!”

Conservative Rick Perkins, a Nova Scotia MP, repeated the oft-used party line: “After eight years, the prime minister admitted his carbon tax is punishing Canadians and making life unaffordable.

“The Liberals just announced their re-election platform: vote Liberal and quadruple the carbon tax on home heating oil after the next election,” continued Perkins, calling the move a “bait and switch.”

In response, Housing Minister Sean Fraser — also representing Nova Scotians — said Perkins “missed the point of this program entirely.”

“He’s concerned that people will pay a higher price after the pause has ended and the price comes back into effect. If people install a heat pump, they won’t pay it at all. And that is the point,” said Fraser.

In an emailed statement to Canada’s National Observer, Green MP Mike Morrice said: “The real problem here is the billions in subsidies the federal government is giving to the oil and gas industry — as well as the excess profits we allow them to rake in with impunity — which should have long ago been reallocated to incentivize Canadians to switch to lower-cost clean energy solutions.”