The federal government has rejected calls for more carbon-pricing concessions, saying its carveout aimed at improving the affordability of home heating oil 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 tried Tuesday to shut down growing calls for changes to his government’s marquee climate policy. Premiers in several provinces have criticized the changes unveiled last week, with Saskatchewan’s Scott Moe threatening to stop collecting fees from the carbon price applied to natural gas in his province.
Mr. Moe and other premiers argue Ottawa should bring in more exemptions, saying applying a carveout just to home heating oil is unfair and creates a two-tier system. Mr. Trudeau was unmoved, saying the federal government’s decision to keep the carbon levy on other fuels, such as natural gas, was final.
“There will absolutely not be any other carveouts or suspensions of the price on pollution,” Mr. Trudeau told reporters on his way into Question Period on Parliament Hill.
Mr. Trudeau, who last week cited the carveout as an affordability measure, took a new tack Mr. Trudeau in justifying the government’s decision. He said Ottawa has also decided to phase out the much dirtier oil, comparing it at one point to the phasing out of coal.
“A number of years ago we made the decision to phase out coal because it was dirty and inefficient in how it powered our country,” Mr. Trudeau said in the House of Commons. “We are now making the decision to phase out home heating oil because it is more expensive, because it is more polluting and because it is disproportionately relied upon by lower-income Canadians who need extra support.”
His move has united political parties on both sides of the spectrum, with both federal and provincial conservatives and New Democrats accusing Mr. Trudeau of regional favouritism. Heating oil is disproportionately used in Atlantic Canada, where the Liberals have their only rural stronghold.
Prominent Liberals, including former Bank of Canada governor Mark Carney, and a leading business group also said the government made a mistake with its carbon-price reversal last week.
Mr. Trudeau and his top ministers showed a united front against the critics Tuesday. Just hours before the Prime Minister spoke, Natural Resources Minister Jonathan Wilkinson and Environment Minister Steven Guilbeault rejected any future exemptions. However, Mr. Guilbeault also once said there would be no carveout on home heating oil.
In addition to the carbon-price exemption on home heating oil, the government is also launching a pilot program in Atlantic Canada to cover the costs of switching from oil to heat pumps for lower-income households. It is also doubling the rural carbon price rebate in provinces that are subject to the federal carbon levy, including Ontario, Prairie provinces, as well those on the East Coast.
In Atlantic Canada, government numbers show approximately 30 per cent of households rely on home heating oil. In Ontario, only 2 per cent of households use the fuel, according to Statistics Canada.
However, the Liberals argue that the percentages hide the real impact of the policy change in other regions. For example, numbers provided by Mr. Guilbeault’s office show about 266,000 Ontario households that use home-heating oil will also benefit from the carbon-price exemption. In all four Atlantic provinces, about 286,000 households use oil.
Prime Minister Justin Trudeau said on Oct. 31 there will be no further carbon price carve-outs. The comment comes as criticism of his decision to temporarily exempt home heating oil from the policy mounts, and his cabinet tries to quiet accusations of regional political favouritism.
The Canadian Press
But accusations of regional favouritism were amplified after Economic and Rural Development Minister Gudie Hutchings, in response to a question on CTV’s Question Period with Vassy Kapelos about whether the government would grant other heating fuel carveouts, replied in part, “perhaps they need to elect more Liberals on the Prairies.”
Those comments emboldened Mr. Moe, who said he would ask SaskEnergy to stop collecting and submitting fees from the carbon price applied to natural gas, which more than 90 per cent of Saskatchewan households use to heat their homes.
The government first declined to comment on Mr. Moe’s statements, but by Tuesday’s cabinet meeting 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,” Mr. Wilkinson said. “It is a requirement that they collect that or that it be collected in some way.”
Mr. Guilbeault rejected criticisms from many scientists, economists and climate think tanks who have said that last week’s climbdown undercuts the government’s climate policies.
“Some people have said that this would slow down our fight against climate change,” he said. “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 also said that with home-heating oil accounting for about 1 per cent of Canada’s emissions, the vast majority of pollution is still covered by carbon pricing.
The furour over carveouts comes amid back-to-back climate summits in Ottawa featuring prominent Liberal environmental voices, including former Bank of Canada governor Mr. Carney and former environment minister Catherine McKenna, both of whom hold climate leadership roles at the United Nations.
At a Tuesday morning speech, Mr. Carney pressed Canada to stick with predictable climate policy and 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,” Mr. Carney said.
“I would have looked for other ways to provide that support than the route chosen,” he said.
He added that there needs to be clarity and certainty in the government’s plans because that’s what “helps to incentivize change.”
Mr. Carney, however, also applauded the Liberals, saying no previous government or prime minister in Canadian history has done more on climate.
“We can’t continuously lurch back and forth because, guess what, that’s terrible for business. Business needs certainty,” said Ms. McKenna, without directly referencing last week’s carbon-price reversal.
Their concerns about policy certainty were echoed by one of Canada’s leading business lobby groups. The exemption will have “severe ramifications on the future of Canada’s carbon pricing regime,” Robert Asselin, the senior vice-president of the Business Council of Canada, said in a statement.
“Once it has been subject to arbitrary exemptions, the policy instrument will no longer be effective.”
The Liberal government exemption to its carbon levy comes as it faces a tough political climate. According to polling numbers released by Nanos Research Tuesday, the Official Opposition Conservatives now have a more than double-digit lead over the Liberals. And Mr. Trudeau’s party is trailing in every region but Quebec.
That political backdrop was the focus of opposition attacks in Question Period Tuesday.
“This is clearly not about environmental science, it is about political science,” said Mr. Poilievre. He urged Mr. Trudeau to pause carbon pricing, and treat the next election as a referendum on it.
Mr. Trudeau called the suggestion “amazing,” saying that the Liberals campaigned on it in the last three elections, and the Conservatives lost. “They continue to say no plan against climate change is what is good for Canadians,” he said.
NDP Leader Jagmeet Singh called the new policy divisive and said it shows the “Liberal government only wants to help people who vote for them.”
With a report from The Canadian Press.