New Prime Minister Mark Carney acted on one of his Liberal leadership campaign commitments within hours of being sworn in on Friday.
While Carney signed a symbolic order to remove the unpopular federal fuel charge — more commonly referred to as the consumer carbon tax, cabinet approved an Order-in-Council setting the carbon price at $0 after March 31, 2025. This includes the tax paid by farms on propane and natural gas.
Parliamentary approval is required to repeal the legislation behind the carbon tax, but cabinet has the authority to make regulatory changes under the Greenhouse Gas Pollution Pricing Act. The carbon price was otherwise slated to rise another $15 on April 1 to $95 per tonne of CO2-equivalent emissions.
The prime minister also said carbon rebate cheques scheduled for April will still be sent out. If he triggers an election before Parliament resumes on March 24, as is expected, the rebates would arrive during an election campaign.
Newly sworn-in Agriculture Minister Kody Blois told reporters that cutting the carbon tax was “a really important move for farmers.”
Blois was the only Liberal MP to vote in favour of Bill C-234, the Conservative private member’s bill that would have removed the carbon tax from natural gas and propane used on farms, when it was approved at second reading in the House of Commons in 2022.
“This is extremely important at a time, particularly when we’re dealing with challenges in Western Canada. One of my first calls today will be to Minister Harrison in Saskatchewan, as we’ve seen the tariffs that have been posed by the Chinese on canola, around meal and certainly on oil,” noted Blois, following his first cabinet meeting. “So this is extremely important. It’s good for consumers. It’s good for farmers, and small businesses will continue to receive the rebate.”
Conservative Leader Pierre Poilievre called Carney’s day one order a “sleight of hand,” noting the legislation for implementing the carbon tax has not been repealed.
Meanwhile, the federal government’s output-based carbon pricing system for large emitters also remains in place.
During the Liberal leadership race, Carney said he would replace the consumer carbon tax with “a system of incentives to reward Canadians for making greener choices, such as purchasing an energy efficient appliance, electric vehicle, or improved home insulation.”
For large emitters, Carney said his government would “tighten” the output-based pricing system and develop a carbon border adjustment to “prevent carbon leakage, and better economically integrate Canada with allies in the fight against climate change.” His climate plan also included implementing “Made-in-Canada Sustainable Investment Guidelines” for financial institutions and mandating climate risk disclosure by companies across Canada.
