With the carbon tax fading, major parties may shift focus. What will replace it in Canada’s climate strategy?
Ottawa: Remember when every major party backed a carbon tax? It feels like ages ago. Back in 2021, the Liberals, NDP, and Conservatives all promised to put a price on carbon. Even Pierre Poilievre, who now wants to scrap it, ran on that idea.
The carbon tax survived some tough challenges, including legal battles and political pushback. But things changed when Erin O’Toole lost his leadership, inflation soared, and Poilievre took over. Now, the tax is on shaky ground.
It’s interesting to note that the carbon tax isn’t really driving up grocery prices. Research shows it only added a tiny fraction to costs. Plus, if the tax goes away, many households could actually be worse off.
So, was the carbon tax just poorly communicated? Maybe. But it seemed like the debate was settled back in 2021. Now, with leadership candidates like Mark Carney hinting at ditching the tax, it looks like the fight is heating up again.
As we head into 2025, it’s likely no major party will promise to keep the carbon tax. Trudeau’s decision to exempt home-heating oil didn’t help either. Now, both Carney and Chrystia Freeland are reconsidering their stance on the tax.
Even if the carbon tax fades, it doesn’t mean Canada will abandon carbon pricing altogether. The real question is how to cut greenhouse gas emissions effectively.
Canada’s carbon pricing policy has two parts: a fuel levy and a trading system for big polluters. While everyone talks about the fuel levy, the industrial system is expected to make a bigger impact on emissions reductions.
Poilievre hasn’t said he’d scrap the rules for large emitters. That would open him up to criticism for favoring big polluters. Plus, it would complicate his plans to meet Canada’s emissions targets.
Looking ahead, Canada’s industrial pricing could become more important as other regions consider carbon border adjustments. So, even if the carbon tax disappears, parts of Trudeau’s pricing policy might stick around.
Carney has mentioned that if the consumer carbon tax goes, it should be replaced with something better. He’s focused on reducing industrial emissions, which make up a large chunk of Canada’s total emissions.
Transportation is still a big contributor to emissions, but raising the carbon tax on fuel makes politicians vulnerable. Poilievre has called it an “existential threat,” but climate change is the real threat we face.
Could the Liberals have done more to save the carbon tax? Probably. Its demise wasn’t inevitable. But even if it goes, it might have raised the bar for climate policy in Canada.
The fuel charge was expected to cut emissions by a significant amount by 2030. So, if the tax is scrapped, the big question is how to fill that gap. Poilievre hasn’t answered that yet, and the other candidates will need to clarify their plans soon.
In the end, if no party supports the carbon tax, it’ll be tough to have a “carbon tax election.” It might turn into a “climate change election” instead. Regardless, climate change remains a pressing issue that needs addressing.
The carbon tax’s potential end could be a setback for Trudeau’s climate agenda. But the real challenge for his successors will be tackling climate change itself. That’s the core issue we need to focus on.
