Carbon price pause could become a wedge issue in Parliament. Here’s how

The political fight is heating up over Liberal plans to pause the carbon price on home heating oil.

In Ottawa, Conservative Leader Pierre Poilievre is pushing for the NDP to vote against the Liberal carbon pricing policy with a motion set to head to a vote on Monday to pause the price on all forms of home heating.

In an address to his caucus Wednesday morning, Poilievre pointed to the NDP governments in B.C. and Manitoba calling the carbon price pause for heating oil unfair. While the pause would apply across the country, Atlantic Canadians disproportionately use heating oil while Canadians in other regions tend to use other sources.

Both the Alberta and Saskatchewan NDP oppositions are calling on a broader pause for the carbon price instead of it just being for home heating oil, as Prime Minister Justin Trudeau announced last week.

“So, the question becomes, what will Jagmeet Singh do?” Poilievre asked in his caucus address.

“Will he stand with the voters who put their trust in his MPs in places like Timmins and other cold northern communities? Or will he once again sell out working class Canadians in order to suck up to Justin Trudeau? That will be his decision.”

1:51 Political battle heats up over home heating

The federal NDP leader has been calling for the GST to be removed for all forms of home heating, calling it a necessity as winter approaches. The GST is not normally applied to essential goods like basic groceries for example.

Jagmeet Singh says he and his caucus are still looking at the Conservative motion and need to discuss it more ahead of Monday’s vote. While there are similarities in his proposal and Poilievre’s, he says he has concerns.

“We think absolutely that the Liberal government’s approach is divisive. We see that as very unfair and Canadians don’t want an approach to fighting the climate crisis that’s pitting one region against another,” Singh told reporters prior to question period.

“The Conservatives don’t even have a plan to fight the climate crisis. They reject the notion that there is even a climate crisis going on. I’ve met with too many families that have lost everything in the climate crisis that we’re in right now to ignore the reality that we’re up against.”

Part of the NDP’s reason for pushing for a GST removal is that not all provinces are covered by the federal carbon backstop. So, they argue pausing the federal carbon price on all home heating would have no effect in provinces like B.C. with its own carbon pricing scheme.

Despite Trudeau saying Tuesday that there will be “absolutely no more carve outs” in the federal carbon price, University of Calgary economist Trevor Tombe does not anticipate this debate receding as he believes the pause undermines the carbon price.

“Its core strength is in providing a uniform incentive to all individuals, all businesses, regardless of where they live, what sector they’re in, what fuel they use,” Tombe said.

“So, I think this is a move that not only undermines the carbon tax itself but changes the conversation around the carbon tax in a fundamental way that will potentially lead to more exemptions. And I, I think potentially the carbon tax itself, at least at the retail level, being removed entirely.”

1:52 Trudeau says ‘absolutely not’ to more carbon tax exemptions

Last Thursday, Trudeau said part of the reason for the home heating oil carbon price pause is to help residents with their energy bills. On this point, Tombe says it makes the move look to be more politically than environmentally motivated.

“If the concern was affordability, there are other approaches. We could provide cash transfers to individuals like the federal government did by boosting the rural rebate. That’s entirely appropriate,” Tombe said.

“That’s not something that undermines the carbon tax itself.”

As for pitches from the other parties, Tombe says the GST is meant to be a revenue driver for the government and not a behaviour changing mechanism like the carbon price so he believes it should be kept.

In terms of equity, he says removing the carbon price from all forms of home heating is best if it’s going to be removed from one type, since inflation is a national issue not a regional one. However, he still sees this as problematic.

“I think the carbon tax ought to apply broadly to all emissions, and if we have affordability concerns, those should be addressed with cash transfers,” Tombe said.

Poilievre concluded the English portion of his address to caucus by challenging Trudeau to make the next election about the carbon price. Poilievre has been holding rallies across the country focused on the policy he calls “axe the tax.”

“Justin Trudeau just has to decide when that will happen, but it will happen and Canadians will decide and they will choose a common-sense Conservative government to axe the tax,” Poilievre concluded.

The prime minister was asked about this on his way into the Liberal caucus meeting Wednesday morning and said Poilievre has “no plan to fight climate change and therefore no plan for the economy.”

“I think Canadians are deeply, deeply concerned about the need to continue to fight climate change in ways that makes life more affordable for them,” Trudeau said.

“That has been at the heart of what we’ve been doing for eight years with a plan that puts more money in the pockets of eight out of the 10 Canadians with the carbon price rebate.”

The NDP and Liberal supply and confidence agreement has the NDP supporting the Liberals on confidence motions for the duration of this minority mandate, in exchange for the government advancing certain priorities like dental care.

Confidence votes are conventionally any motion dealing with matters of supply or budgetary matters or anything that explicitly expresses a lack of confidence in the government, but can also be any vote that the government chooses to designate as a matter of confidence.

If the agreement holds, an election is not expected until fall 2025.