Carney to announce plan to kill consumer carbon price

OTTAWA — Liberal leadership contender Mark Carney is expected to announce a plan on Friday to abandon consumer carbon pricing but keep industrial pricing in place.

“The consumer carbon tax isn’t working — it’s become too divisive,” Carney said in a written statement provided to The Canadian Press ahead of the announcement.

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“That’s why I’ll cancel it and replace it with incentives to reward people for greener choices.”

That would include energy efficient appliances, electric vehicles and improvements to home insulation, he said.

Carney, a former Bank of Canada governor who has spent the last several years as a United Nations special envoy for climate action, is also expected to outline a plan that would have big polluters, including oil and gas companies, help pay for Canadians to make those choices while still paying “their fair share for emissions.”

A campaign spokesperson said Carney will reveal more details at an event in Halifax on Friday morning where he will be joined by former housing minister Sean Fraser and the Liberals’ Atlantic caucus chair Kody Blois.

The announcement seems likely to be the end of the road for one of the signature climate policies of Prime Minister Justin Trudeau, with most other candidates still in the race promising to end or at least freeze the existing carbon price charged on fossil fuel purchases.

The policy, which has been in place since 2019 and currently charges $80 per tonne of emissions. But it has two branches. The big industrial system charges the price on a share of actual emissions from large polluters like oilsands mines, auto factories and steel manufacturing.

The consumer branch adds the price to the purchase price of 22 forms of fuel bought by individual consumers or smaller businesses and non-profit entities like schools and hospitals. It adds about 17.6 cents to a litre of gasoline and 15 cents to a cubic metre of natural gas.

While the government compensates Canadians for the cost with quarterly rebates the policy has never been that popular and Conservative Leader Pierre Poilievre has made “axing” it the centrepiece of his pitch to Canadians.

He isn’t buying that the Liberals are abandoning the policy under new leadership, referring to all the candidates with the moniker “Carbon Tax” in front of their names.

But they all say they are backing away from it in some way.

Former finance minister Chrystia Freeland has also promised to end the consumer carbon price, due to sagging public support for the Liberal government’s keystone climate policy.

Former House leader Karina Gould said she freeze the carbon price at its current rate, but not to abolish it. She said she would forego the April 1 increase to the price on pollution.

Frank Baylis, a businessman and former MP from Montreal, said at his official campaign launch Thursday that he would fix the carbon price but didn’t say how. Baylis said the current policy is not working and is “hurting the wrong people.”

They all appear only to be targeting the consumer carbon price, not the industrial version.

An analysis published in March 2024 by the Canadian Climate Institute found Canada’s carbon price could slash greenhouse gas emissions by more than 100 million tonnes a year by 2030, but only about one-fifth would come from the consumer carbon price.

Most of the reduction came from the big industrial system.

Most of the Liberals have previously defended carbon pricing, including Carney.

In 2021, while attending annual UN climate talks in Scotland, Carney participated in a panel with Trudeau discussing the need for more countries to price carbon as an way to drive down emissions.

“Everyone should try and have a price on carbon,” he said at the time.

During his leadership launch in Edmonton on Jan. 16, Carney said if carbon pricing is to go, it must be replaced “with something that is at least, if not more, effective.”

This report by The Canadian Press was first published Jan. 31, 2025.

Nick Murray, The Canadian Press