Environment Minister Steven Guilbeault is acknowledging the federal carbon tax has become an unpopular policy, and that it could potentially be replaced with a different “environmental measure.”
“If we remove [the carbon tax], we not only need to replace an environmental measure with another one that would be equivalent, but we also need to find a way to continue supporting Canadians in those times of challenges with affordability and cost-of-living issues,” Guilbeault told reporters on Jan. 21 in Montebello, Que.
If the government decides not to move ahead with the carbon tax, one “obvious answer” instead would be to “tighten” the industrial carbon pricing system, Guilbeault said. This system provides three times the emissions reductions of the consumer carbon tax, he added.
The federal carbon tax originally came into effect at $20 per tonne in 2019 and has climbed by $15 annually ever since. It is set to hit $170 a tonne in 2030.
The Conservative Party has been highly critical of the carbon tax, arguing the tax increases the cost of essentials such as food, fuel, and heating. The Liberal government, meanwhile, has maintained that most Canadian households receive more money back in rebate payments than they pay out in carbon tax.
The Parliamentary Budget Office released a report in October finding that the average Canadian household would receive more from the Canada Carbon Rebate than what they pay out in the federal carbon tax and related goods and services tax by 2030. However, the report said that households were worse off when the economic impact on Canada’s GDP and investment income is factored in.
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Guilbeault told reporters Jan. 20 that he has defended the consumer and industrial carbon pricing schemes for the last three years, and accused Conservative Leader Pierre Poilievre of contributing to the policy’s unpopularity among Canadians through the spread of “disinformation.”
Guilbeault told reporters on Jan. 21 that he planned to endorse former Bank of Canada Governor Mark Carney for leader of the Liberal Party, saying he had worked together with him on issues like the green energy transition and fighting climate change.
“He has the experience, he has the background,” he said. “He’s navigated crises when he was at the Bank of Canada and the Bank of England, and I know he’s the right person to help bring us into the next phase of our work, to support Canadians to build a strong economy and to fight climate change.”
When announcing his leadership campaign on Jan. 16, Carney said if the Canadian government were to get rid of the carbon tax, then it should “replace it with something that is at least, if not more, effective.”
Carney previously said in his book published in 2021 that Canada’s carbon pricing system was “a model for others.”
Guilbeault told reporters Canada’s fight against climate change was “based on hundreds of different measures.” He said he would work with Carney to replace the carbon tax with another policy to reduce emissions and increase affordability.
