Prime Minister Justin Trudeau makes an announcement that the government will double the carbon price rebate for rural Canadians, during a news conference in Ottawa on Oct. 26.Sean Kilpatrick/The Canadian Press
Pierre Poilievre won’t need to kill the carbon tax on fossil fuels. Justin Trudeau is doing that already, with a hashed-together plan that not only turns the Liberals’ climate policy into a muddle but also effectively concedes the debate to the Conservative critique of carbon pricing.
Mr. Trudeau claimed Thursday that his government is “doubling down” on that policy. The opposite is true: the changes represent the start of an unravelling of the government’s carbon tax.
For eight years, the Liberals have made an escalating charge on fossil fuels the centrepiece of their climate-change strategy, arguing (correctly) that it is the most efficient way to reduce greenhouse-gas emissions. Those predictable increases give households and businesses motivation to reduce their fossil-fuel consumption through conservation, and making clean-energy investments, the Liberals have said.
There were always quibbles to be had with the Liberals’ carbon-pricing approach, particularly the years-long delay in fully rolling out the tax to the Atlantic provinces. But the Liberals had both a coherent policy and a powerful political argument to make on the climate file.
Both are in tatters, as the Liberals exclude home heating oil from the carbon tax until 2026, the year after an expected federal election. Indeed, that time frame is the Rosetta stone to Thursday’s announcement, which has nothing to do with rising greenhouse-gas emissions and everything to do with the declining poll numbers for the Liberals in Atlantic Canada since the carbon tax took full effect in the region on July 1.
Until Canada Day, the carbon tax’s weight was not felt in Atlantic Canada, where the provinces had cut fuel taxes as an offset and had largely exempted home heating fuel. The Liberals, to their credit, extended carbon pricing to the region on July 1, but their fortitude lasted less than four months.
On the policy front, the exemption of heating oil – far more carbon-intensive than natural gas – is ludicrous, particularly the invocation of energy poverty by the Liberals. A low-income household using gas will continue to pay the carbon tax; a high-income household with an oil furnace will not.
Mr. Trudeau’s seemingly panicky changes also undermine the predictability that gives carbon pricing much of its power. Why would anyone make a costly energy-saving investment when the Liberals have begun to erode carbon pricing?
Already, the premiers of Alberta, Saskatchewan, Ontario, New Brunswick and Nova Scotia have made the point that continuing to tax natural gas and not heating oil makes no sense. All five premiers already opposed the carbon tax, but they are right to flag the inequity – particularly since Atlantic Canada will benefit disproportionately due to the prevalence of oil as a source of home heating. (One bright spot: increased payments to rural households are region-agnostic.)
An emboldened Mr. Poilievre is promising to finish what Mr. Trudeau has started, and to eliminate the fuel charge altogether. Notably, the Tory leader is not making such a promise about the industrial carbon tax levied on heavy emitters.
What, exactly, could be the Liberals’ rebuttal? There is no rejoinder on the basis of fighting climate change; if anything, the heavier carbon footprint of heating oil points in the other direction. Nor could there a rational response based on the notion (proffered last week) of helping overstretched households; poor Canadians stuck with natural gas get no relief.
In reality, the answer is this: those regions with the prescience to deliver Liberal seats will get help. The same rank regional favouritism is at work with the announcement of free heat pumps for lower-income households, but for now only as a “pilot project” in Atlantic Canada. Rural Economic Development Minister Gudie Hutchings dispelled any doubts on the weekend, advising disgruntled Canadians to “elect more Liberals” if they want their concerns heard.
This episode highlights the deeper failures of Mr. Trudeau and his Liberal government: not just his penchant for stoking regional divisions but the long list of major commitments scrapped when no longer politically convenient. The Liberals’ retreat on climate-change policy joins electoral reform, balanced budgets, a less PMO-centric government and meeting our NATO military-spending target, to name only the most egregious entries on that list.
What principle will Mr. Trudeau stand for in the next election, what vision will he offer and what legacy will he seek to defend? The more important question is this: Who would believe him after last week’s performance?