After a temporary but still dramatic climbdown on its signature carbon pricing policy, the Trudeau government is taking heat from multiple directions, with carbon pricing opponents demanding further concessions but other voices calling on Ottawa to double down on energy efficiency as the surest route to lower heating bills for the households in greatest need of relief.
The Globe and Mail editorialized that “the Liberals’ credibility on the carbon tax has gone up in smoke”, arguing that “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.”
Other observers welcomed a three-year heat pump conversion plan that will help families ditch expensive heating oil, initially in Atlantic Canada, but warned that the move to suspend the federal carbon price on home heating oil would create uncertainty for investors and make the transition to clean energy more expensive.
“The steps the government is taking to help more households switch from costly heating oil to cleaner and lower-cost heat pumps will tangibly reduce the cost of living for many families. That’s a good thing,” wrote Dale Beugin, executive vice president of the Canadian Climate Institute.
But the “decision to temporarily exempt home heating oil from carbon pricing introduces uncertainty to Canadian climate change policy. It sends the signal to emitters—and investors—that policy can be weakened in the future, diluting the carbon price’s effectiveness in driving the long-term, low-carbon investments required to reduce emissions.”
“With fossil fuel prices soaring once again, it is absolutely right that governments should help those feeling the crunch, and increased support for families getting off of expensive heating oil and onto heat pumps will do just that,” Clean Energy Canada Executive Director Mark Zacharias said in a statement. “But by making heating oil temporarily exempt from carbon pricing, the federal government may leave Canadians with the impression that carbon pricing—as opposed to fossil fuel inflation—is the culprit for skyrocketing heating oil prices,” when “Canadians are overwhelmingly feeling the impacts of geopolitics and fossil fuel inflation, not a climate policy.”
Through the weekend and Monday, several climate hawks pointed out that the federal carbon price is rebated to households quarterly, so that the cost pressure lands on fossil fuel products but not on the Canadians who still depend on them. In the Atlantic provinces, the quarterly rebate ranges from C$92 for an individual and $138 for a couple in New Brunswick to $164 for an individual and $246 for a couple in Newfoundland and Labrador—before factoring in the decision last week to double the quarterly rebate for people in rural areas. The two provinces that receive the highest rebates are Alberta, at $772 for individuals and $1,158 for couples, and Saskatchewan, at $680 for individuals and $1,020 for couples.
A Path to Wider Buy-In
At least one national think tank is calling on the government to extend funding for low-income heating conversions across all fuel types and all provinces and territories. Efficiency Canada says Ottawa can shore up public support for its carbon and climate policies by making a more generous incentive under the $250-million Oil to Heat Pump Affordability Program available to low- and moderate-income households across the country, no matter what fossil fuel they currently depend on.
“The government seems to have recognized that it needs to provide tangible ways for people to reduce their emissions and energy costs through energy efficiency, and that low-income Canadians need support to pay up-front costs,” Research Director Brendan Haley told The Energy Mix in an email. “We just need that commitment to be expanded across the country and not restricted to those who heat with fuel oil.”
Efficiency Canada has been urging the government to include a low-income energy efficiency program in its Green Buildings Strategy. Now, that long-awaited release could be an opportunity to “refresh the government’s climate agenda” by talking “about improving affordability and reducing emissions at the same time,” Haley said.
“I think most Canadians accept that pollution shouldn’t be free, but they want political leaders to also understand the need for economic security and fairness,” he added. “So if the federal government wants to create the right social conditions for its carbon pricing policy, it should start by making energy efficiency accessible to every low-income Canadian, regardless of the type of fuel they use.”
After that, “more can then be done to make building retrofits easier and more affordable,” Haley wrote, by expanding pilot projects for neighbourhood-wide energy retrofits and with “efficiency as a service” models that cover the cost of deep retrofits out of the energy savings they produce over time.
Provincial Premiers Weigh In
But energy efficiency didn’t appear to be on the agenda as several provincial premiers amped up their opposition to a carbon price they’ve been vilifying for years, with Doug Ford of Ontario, Scott Moe of Saskatchewan, and Danielle Smith of Alberta demanding that Ottawa extend the carve-out to their provinces, the Globe and Mail reports.
“While this is a step in the right direction, the vast majority of people in Ontario heat their homes and businesses with natural gas and will still have to pay the carbon tax,” Ford said on social media. “I’m urging the Prime Minister to do what’s right and eliminate the tax altogether.”
“The federal government has decided that one part of Canada with one type of home heating is worthy of a carbon tax break, while those living elsewhere using another type of home heating do not,” Smith added.
Alberta NDP leader Rachel Notley agreed that “to apply a carbon price to only some regions and some fuels is totally unacceptable.”
Farm and small business groups also called for exemptions to what they see as the disproportionate costs the carbon price requires them to bear.
“We’ve been told for years that there’d be no exemptions from carbon pricing because it would erode the signal to change behaviours and that any change would be a slippery slope,” said Dave Carey, co-chair of the Agriculture Carbon Alliance,” a 15-member industry initiative. “If the Trudeau government is willing to exempt Atlantic Canadians, we’re hoping to see exemptions for Canadian farmers, ranchers, and growers from coast to coast to coast as well.”
On Monday, Moe vowed to stop collecting the carbon levy from 400,000 natural gas customers in Saskatchewan if Ottawa doesn’t extend the exemption by January 1. After Rural Economic Development Minister Gudie Hutchings suggested over the weekend that Prairie provinces should elect more Liberals if they want to push for similar exemptions, Moe retorted that “this is no way to run a country”.
Hutchings had pointed out to host Vassy Kapelos on CTV’s Question Period show that the government’s decision to double the rural rebate was championed by the Atlantic Liberal caucus, but will apply across the country.
Following Thursday’s announcement, federal Conservative leader Pierre Poilievre offered his MPs’ “full cooperation” if the government suspended the carbon tax on gas heat. “Unlike Pierre Poilievre’s Conservatives, we know that climate change is real and it cannot be free to pollute,” responded Katherine Cuplinskas, a spokesperson for Deputy Prime Minister and Finance Minister Chrystia Freeland. “That’s why we put a price on carbon pollution across Canada.”
But Kory Teneycke, former director of communications to then-prime minister Stephen Harper and campaign manager for Ford, said the climbdown could simultaneously offend carbon price supporters and voters who feel they’ve been left behind by the exemption. “They were bleeding out of one side of their voter coalition,” he told Kapelos. “Now I think they’re going to be bleeding out of both sides of their voter coalition.”