No more carve-outs coming, Trudeau tells Canadians hoping for carbon tax pause on all home heating types

The federal government will not be offering any more carve-outs to the carbon pricing policy beyond the plan to pause the tax on home heating oil, Prime Minister Justin Trudeau said Tuesday, doubling down on comments his natural resources minister made.

“There will absolutely not be any other carve-outs or suspensions of the price on pollution,” Trudeau said. “This is designed to phase out home heating oil, the way we made a decision to phase out coal… This is specifically about ending the use of home heating oil, which is more polluting, more expensive, and impacts low-income Canadians to a greater degree.”

In a scrum with reporters on his way into a cabinet meeting earlier Tuesday, Natural Resources Minister Jonathan Wilkinson faced a series of questions about the Liberals’ three-year pause on the federal carbon tax on home heating oil.

Asked whether the government is considering the calls coming from across the country and political spectrum to expand the affordability break across all forms of home heating, the answer was no.

“There will be no more carve-outs coming,” Wilkinson said.

On Thursday, Trudeau announced the temporary break for households who use home heating oil, a move that primarily will assist Atlantic Canadians, alongside plans to double the pollution price rebate rural top-up rate, and to roll out new incentives to make it more affordable for those using heating oil to transition to heat pumps. 

“Home heating oil is significantly more expensive. It has escalated significantly in the last couple of years,” said Wilkinson, who is a B.C. MP. “It is predominantly a rural thing… there is a lot of energy poverty concentrated with people who actually use home heating oil. We have actually come up with a solution to get them off of that, and to reduce their overall expenditures.”

The pollution pricing pivot on what has been the cornerstone of the government’s environmental platform quickly saw Conservatives and western premiers balking at the unfairness, noting there’s no comparable affordability break being offered to Canadians who may be struggling to afford to heat their homes using other more environmentally friendly and cost-effective forms of energy.

“Apparently we’re going to have different tax rates in different constituencies depending on how people vote. Why is it, Mr. Speaker, that the Liberal MPs in… other freezing cold communities are not getting the same break? Is it because their local Liberal MP is utterly useless?” asked Conservative Leader Pierre Poilievre during Monday’s carbon pricing-dominated question period.

“He said that the tax would make people better off, he’s now admitted that that’s not true. He said it’s about the environment, but he leaves the tax on lower-admitting and more environmentally friendly, natural gas. And now he’s dividing Canadians based on where they live. So will he stop creating two classes of Canadians?” asked Conservative Leader Pierre Poilievre during Tuesday’s question period. “Will he take the tax off all, so Canadians can keep the heat on?” 

During a keynote in Ottawa on Tuesday, U.S. ambassador to Canada David Cohen commented briefly on Trudeau’s carbon tax policy, as he discussed how the two countries can both be committed to tackling climate change, while taking different approaches.

“Canada has chosen—at least until this last week— to use the carbon tax as a principal method to accomplish those objectives,” Cohen said, to light laughter from the audience. “I don’t mean to be snide. I mean, Canada has chosen to use the carbon tax. The United States is not using the carbon tax. We don’t agree with that tactic… It doesn’t mean that we have any criticism of Canada for using the carbon tax in that way.” 

The government has also come under considerable scrutiny over Rural Economic Development Minister Gudie Hutchings stating perhaps the Prairies need to “elect more Liberals” to secure carve-outs for other forms of home heating, in the context of questions over the internal caucus pressure underpinning the climb-down.

Several ministers faced questions Tuesday about how they plan to explain to their constituents that they won’t be receiving a carbon tax break, beyond the existing rebate. One of the governing caucus’ two Alberta MPs, Employment Minister Randy Boissonnault, sought to clarify that his party governs “as a country.”

“I’m not going to sit here and tell different regions of the country who they should vote for, I fight for every one of the votes that I get,” Boissonnault said. “What we’ve done in this particular case on the gas emissions and home heating oil, is to be responsive and flexible to a region of the country that simply doesn’t have alternatives, and I do think it’s going to help our plan succeed in the future.”

Defending the carbon tax as “a very effective mechanism… to lower the consumption of carbon,” Defence Minister and Ontario MP Bill Blair pointed to the “significant” quarterly rebate Canadians receive.

“I live in a community where we’ve seen a lot of heat pump uptake in the last number of years, but not as much as I would like. And the people who’ve made the change are saving in some instances thousands of dollars every year,” said Housing, Infrastructure and Communities Minister and Nova Scotia MP Sean Fraser. “So, from my perspective, targeting a terrible source of pollution that cost families a lot of money is a sensible thing to do.”

After echoing some of the concerns of provincial carbon pricing opponents Alberta Premier Danielle Smith and Saskatchewan Premier Scott Moe about Trudeau’s recent policy revision, NDP Leader Jagmeet Singh held a press conference on Parliament Hill Tuesday, in which he slammed Trudeau’s Liberals for being divisive.

“They’ve lost their credibility on climate change,” Singh said. “They put in place a plan that should be bringing Canadians together and then used that instead to divide Canadians, and really, in a horrible way over the weekend the minister made it really clear that is exactly their approach… ‘Who did you vote for? OK, you get a break. If you didn’t vote for us, you don’t get a break.’ That is not the way to build a nation,” Singh said.

The NDP leader also revived his call for the Liberals to lower costs for all Canadians heading into the winter, by taking the GST off home heating.

This is a developing story, check back for updates…