Pressure mounts to overhaul carbon tax

As Canadians struggle with the rising cost of living, pressure is mounting on the federal government to carve up its flagship climate policy like a Thanksgiving turkey.

What happened: The premiers of Ontario, Alberta, Saskatchewan, Nova Scotia, and New Brunswick signed an open letter to Prime Minister Trudeau calling for the federal government to drop the federal carbon tax from all forms of home heating. 

  • The letter follows the federal government’s announcement last month that it would suspend the carbon tax on home heating oil, which will mostly impact Atlantic Canada, where it is used by around 30% of households.

  • The federal Conservatives and NDP also called on the government to expand the exemption to all forms of home heating, along with BC Premier David Eby.

Why it matters: The federal government’s decision to create one exemption in the carbon tax has unleashed powerful political pressure to add many more carve-outs, a process that risks destroying their flagship climate policy.

What’s next: Prime Minister Trudeau has been emphatic that home heating oil will be the only carve-out from the tax, and his Environment Minister has suggested he could resign if any more were to be introduced, but now that the floodgates have been opened on exemptions, they may be hard to close.—TS