Canada’s Trudeau on back foot over carbon tax

Polluters should pay up, Canadian Prime Minister Justin Trudeau insists. But pressure is mounting to scrap his signature climate policy, a federal levy on CO2 emissions, as ordinary Canadians see the law increase their own cost of living.

The levy, applied to a myriad of fossil fuels used by both industry and consumers, is scheduled to rise from Can$64 to Can$80 (US$48 to US$59) per metric ton of carbon on April 1, in a bid to see Canadians slash their total carbon emissions by 40-45 percent below 2005 levels by 2030. But it’s adding to household costs at the same time that people are feeling the bite from inflation.

Seven provinces have asked the government to pause or cancel the increase, which would add about three cents per liter (quarter gallon) to the price of gasoline. Newfoundland Premier Andrew Furey—a liberal from Trudeau’s own party—was the latest this month to join his conservative peers in seeking a reprieve “at least until inflation stabilizes.” Saskatchewan, meanwhile, is refusing to collect and remit the tax to Ottawa.

In some ways Trudeau has already caved to pressure, issuing in October a three-year exemption of the tax on home heating oil. The Atlantic region, where 24 Liberal House of Commons seats are at stake, benefits the most from the change. In parliament recently, a mushroom farmer’s hefty gas bill became the focal point of sparring match between Trudeau and his main rival, conservative leader Pierre Poilievre—who vowed to “axe the tax” if he defeats the Liberals in elections next year.

Mike Medeiros paid Can$16,668.39 for the federal carbon tax on his February natural gas bill that hit a total of Can$62,441.95. His Osgoode, Ontario, farm employs 160 workers producing 200,000 pounds of mushrooms per week, and uses 1.3 million cubic meters of natural gas per year to sterilize and control the heat and humidity in 50 growing rooms. By contrast, the average Canadian home uses 2,400 cubic meters of gas.

By the time the carbon tax increases to $170, set for 2030, “our carbon tax costs for heating alone will be half a million dollars,” Medeiros told AFP. “I can’t absorb that cost.” Ottawa has rolled out more than 10 climate plans since 1990 but all have failed to achieve their goals, making Canada an outlier among G7 nations, with its greenhouse gas emissions rising 13.9 percent to 670 megatons from 1990 to 2021.

The environment commissioner in November said its latest efforts could also fall short of the 2030 target, despite government assurances. According to the Angus Reid Institute, a public opinion research group, Canada’s soaring cost of living is the top concern for 56 percent of Canadians, outweighing climate change, which polls as the top concern for 31 percent of respondents.

And 40 percent of those polled want the carbon tax abolished versus only 27 percent who say it should increase as planned. Ottawa waitress Rima Sab, 54, said she doesn’t like paying the federal levy, but supports it. “The carbon tax sucks. But climate change sucks more,” she said. “If we don’t do something now, what will be left for my kids?” During a visit to oilrich Alberta, Trudeau called out “short-term thinker politicians” opposed to the levy that is projected to account for one third of Canada’s emissions reductions, telling reporters “doing the right things today... will deliver a better future.”

In a letter to wayward provinces, he said carbon pricing is “the most efficient way to reduce emissions across the economy” while adding only 0.1 percent to inflation.

Most Canadians get a carbon rebate or “more money back than they pay,” he added, while “the devastating effects of floods, wildfires and droughts are escalating costs annually” for all.