Trudeau says there will ‘absolutely not’ be further carbon tax exemptions

Prime Minister Justin Trudeau is standing firm that his government will not make any further exemptions to the carbon tax after announcing a three-year break on heating oil.

“There will absolutely not be any other carve-outs or suspensions of the price on pollution,” Trudeau told reporters on his way into Tuesday’s question period.

Last week, Trudeau announced that the government would exempt heating oil from the carbon tax for three years. He said the pause is meant to give Canadians who use oil to heat their homes more time to switch to other sources, such as electric heat pumps.

But the Liberals are facing increased political pressure from the Conservatives and some provincial premiers to exempt fuels like propane and natural gas from the tax.

Trudeau defends change to carbon tax on home heating oil

Prime Minister Justin Trudeau says there will ‘absolutely not’ be further carbon tax exemptions after his government announced a three-year break on home heating oil.

Last week, Saskatchewan Premier Scott Moe and Alberta Premier Danielle Smith called on Ottawa to apply the same exemption to natural gas, used by a majority of residents in their provinces for heating.

On Monday, Moe upped the ante by declaring that SaskEnergy — the provincial Crown corporation responsible for natural gas distribution — wouldn’t collect the carbon tax starting in January if an exemption wasn’t extended to other heating fuels.

“I cannot accept the federal government giving an affordability break to people in one part of Canada, but not here,” Moe said in a video posted on X, formerly Twitter.

Trudeau defended the decision to only exempt heating oil on Tuesday, arguing that it is more expensive than gas and propane and is generally used by low-income Canadians.

In addition to the carbon tax exemption, Trudeau also announced Thursday that his government would be topping up a grant program aimed at helping Canadians switch to using heat pumps to heat their homes and away from using fossil fuels.

So far only the Atlantic provinces have signed up for the enhanced grant program. On Tuesday, Trudeau challenged Prairie premiers to join in on the program.

“Work with us to make sure that low-income families get heat pumps for free,” Trudeau said Tuesday. “It’s a program for right across the country.”

Opposition says Liberals are dividing Canadians

On Sunday, Conservative Leader Pierre Poilievre wrote a letter to Trudeau calling on the government to remove the tax from all heating fuels.

“You must be consistent and keep the heat on and take the tax off now for all Canadians,” Poilievre told Trudeau.

During Tuesday’s question period, Poilievre accused Trudeau of catering to the Atlantic regions with the exemption on oil.

“He’s dividing Canadians based on where they live. Will he stop creating two classes of Canadians?” the Tory leader asked.

Statistics Canada reports that in 2021, only three per cent of households nationally relied on home heating oil. But while the exemption on oil applies across the country, the largest proportion of homes that use heating oil are in the Atlantic provinces.

In Newfoundland and Labrador, almost one in five households use home heating oil. Two in five Prince Edward Island households and one in three Nova Scotia households are heated with furnace oil. In New Brunswick, one in about every 14 households uses home heating oil.

NDP Leader Jagmeet Singh echoed Poileivre’s comments, accusing the Liberals of dividing Canadians and saying that the government has lost their credibility on climate change.

“Let’s approach [climate change] by bringing people together, not dividing people like Justin Trudeau is doing,” he said during a news conference.

Liberals ‘have lost their credibility’ on climate change, Singh says

NDP Leader Jagmeet Singh says the Liberals are dividing Canadians around climate change with a recent shift in carbon tax policy that will mostly impact people living in Atlantic Canada.

Housing Minister Sean Fraser, who represents a Nova Scotia riding, pushed back against the assertion that the policy was meant to protect Liberal seats in the Atlantic regions.

“We’re dealing with a policy that targets, not specifically a region, but a polluting source of fuel. There may be a disproportionate impact on regions that use that fuel more, but there’s not actually a differential application,” he said.

The government offers a top-up on the carbon tax rebate for rural households to account for increased energy needs in those areas. The government announced last week that it would be doubling that supplement.

Fraser said that top-up to the rural supplement will help all Canadians because it applies across the country.

Employment Minister Randy Boissonnault, an Alberta MP, also pointed to the rebate as a way to help residents in his province.

“What we’ve done here is taken a national approach to a regional situation,” he said.

Former Bank of Canada governor Mark Carney — who has long been rumoured to be a possible future Liberal leadership candidate — credited the government for taking action on climate change, but questioned the exemption for heating oil.

“I would have looked for other ways to provide that support than the route chosen, not least because what is important is that clarity in terms of the overall plan, the overall direction. Because that certainty helps to incentivize change, so you can provide support here, but keep this certainty there,” he said during a net-zero conference in Ottawa on Tuesday.