Prime Minister Mark Carney's first move after taking office on Friday was to eliminate the consumer carbon price, undoing Justin Trudeau's signature climate policy.
Carney addressed members of the media after the Friday afternoon cabinet meeting, saying the government is "focused on action."
"We will be eliminating the Canada fuel charge, the consumer fuel charge, immediately, immediately," he said.
The order-in-council Carney signed in front of cabinet ministers and the press actually stipulates that the "the fuel charge be removed as of April 1, 2025."
That's when the price was scheduled to rise again. Instead, it will be eliminated for consumer purchases.
The price for big industrial emitters remains in place.
Carney also said people who have been getting rebates on the carbon price will get one final payment for the next quarter in April.
Carney had pledged to end the consumer price during the Liberal leadership race and said he would bolster the industrial price paid by big polluters.
Agriculture Minister Kody Blois said he thinks "it's a really good move" because the policy has become very divisive.
He noted the Atlantic Liberal caucus had pushed for changes to the carbon price in the past, and secured a carve-out for home heating oil in 2023.
The consumer carbon pricing policy had been the focus of Conservative attacks on the Liberals for more than two years and had become a symbol of Canadians' struggles with the high cost of living.
Conservative Leader Pierre Poilievre, whose rallying cry of "axe the tax" had him riding high in the polls until about six weeks ago, claimed on Friday that Carney can't really abolish the carbon price without recalling Parliament to repeal the law.
"What he might do is hide the carbon tax by telling (the Canada Revenue Agency) to stop collecting it for two months before the election," Poilievre said, brandishing a copy of the law at a press conference in Ottawa.
He asked reporters whether they really believe Carney's cabinet ministers, who have voted in favour of the carbon price for years, will actually end the policy. He suggested the Liberals would bring it back "two days after the election."
The government is able to end the consumer carbon price without repealing or amending the law.
The Greenhouse Gas Pollution Pricing Act, which was passed in 2019, sets out a framework for both the consumer carbon price and the industrial price.
The law allows the fuel price to be set by regulation, which means cabinet can set the price through an order-in-council, as it did Friday.
The federal government initially set a minimum price on carbon pollution of $20 per tonne, which rose annually. It was set to rise another $15 per tonne in April to $95.
Eliminating the charge will reduce the cost of a litre of gasoline by 17.6 cents, and reduce the cost a cubic metre of natural gas by a little more than 15 cents.
The federal government was not keeping any of the money collected through the consumer carbon price. It was being sent directly to people through the Canada Carbon Rebate, and returned to territorial or Indigenous governments or businesses and non-profit organizations.
Steven Guilbeault, who was Trudeau's environment minister and a staunch supporter of the carbon price, was named minister of Canadian culture and identity and Carney's Quebec lieutenant on Friday.
He told reporters the industrial price "gives us three times more emission reduction than the consumer portion of carbon pricing."
The Liberals have insisted the carbon price is sound policy that was plagued by poor communication and Conservative attacks.
Greenpeace Canada's senior energy strategist Keith Stewart said in a statement on Friday that Poilievre had "successfully poisoned the well on consumer carbon tax by spreading false information."
He added that the industrial carbon price was the source of the bulk of carbon pollution reductions in Canada.
"We are pleased to see that our new prime minister has promised to strengthen it and call on him to maintain and strengthen other key climate and biodiversity protection policies," Stewart said.
Poilievre has pledged that a Conservative government would end the consumer carbon price. He has not said what he would do with the industrial price. Last week, he told reporters they would have to wait until the election campaign begins to see detailed policies.
He has said "axe the tax" will continue to be part of his message to Canadians in the next election.
This report by The Canadian Press was first published March 14, 2025.
Comments
Carney: "This will make a difference to hard-pressed Canadians, but it is part of a much bigger set of measures that this government is taking to ensure that we fight against climate change, that our companies are competitive and the country moves forward." (Mar 14, 2025)
Carney concedes Poilievre's false argument. What a shame.
The carbon levy plus rebate put more money into the pockets of most "hard-pressed" Canadians.
Axing the carbon "tax" plus rebate that ordinary Canadians does not move Canada "forward". A shameful retreat by the Liberals after failing to promote and defend their signature climate policy. Some 80% of households came out ahead after rebate. Carbon pricing with dividend is progressive policy that leaves modest-income households better off.
Axing the tax benefits the rich, energy hogs, and the O&G industry. Low-income households stand to lose the most.
Carney further deceives Canadians on this point — on his first day in office! Not a good first step.
Give Carney an A for political expediency. An F on climate.
That should read:
Axing the carbon "tax" plus rebate does not move Canada "forward".
Where is The Observer's EDIT button?
In 2015, the Pembina Institute, several big-name ENGOs, and Rachel Notley's NDP government negotiated a non-climate plan with Big Oil. These negotiations had been in the works since 2009.
In 2015, Notley's non-climate plan received the blessing of five major oilsands CEOs.
The Alberta NDP's tiny carbon tax was a fig leaf to buy social licence for a new pipeline. A cynical quid pro quo. Hopelessly contradictory climate policy. The proposed emissions cap — well above current emissions level —was never implemented.
Big Oil was fine with a tiny carbon tax that had no real effect and did not hurt its bottom line. Especially if it could buy them "social licence" for new export pipelines that enable oilsands expansion.
A piece of political theatre for a new pipeline.
Notley undermined NDP credibility on climate by hinging her support for a federal carbon tax in exchange for pipelines.
Notley pulled her support for a national "floor price" on carbon after the Federal Court ruling on the TMX pipeline project.
Notley: "The Trans Mountain pipeline expansion must break ground for Alberta to meet federal climate goals."
Notley: "Moving forward with additional hikes with the carbon levy will depend on the Trans Mountain pipeline, as I've said many times over the last year and a half."
Notley: "We will not move forward on the federal government's proposals until we see that construction is fully underway and that approval is given meaning. There is no question that the two were always connected, and they will stay connected."
"Government house leader Brian Mason said the carbon tax was always intended as a tool to force the federal government to support building a pipeline to tidewater."
"Meeting federal carbon tax price relies on Trans Mountain breaking ground, says Alberta premier"
Notley: "So today I am announcing that with the Trans Mountain halted, and the work on it halted, until the federal government gets its act together; Alberta is pulling out of the federal climate plan.
"And let's be clear, without Alberta that plan isn't worth the paper it's written on."
"Justin Trudeau's grand bargain with Big Oil exposed in Donald Gutstein's The Big Stall
"Gutstein reports in The Big Stall that six months after the Winnipeg Consensus was drafted, in 2009, heavy hitters involved in the energy industry and representatives of a small number of environmental organizations met in Banff.
"Among them was the Pembina Institute's Marlo Raynolds, who later became chief of staff to Environment Minister Catherine McKenna.
Another person at this event was Gerald Butts, president of the World Wildlife Fund Canada, who is now the senior political adviser to Trudeau. D'Aquino's successor, former Liberal cabinet minister John Manley, was also present.
"But the biggest news from Banff was the presence of six representatives of a new player on the scene, the Energy Policy Institute of Canada (EPIC)," Gutstein writes. "This organization was incorporated the same month the Winnipeg Consensus was reached, October 2009. It had the backing of Canada's largest fossil fuel companies, like Shell Canada, Imperial Oil, Canadian Natural Resources, and Suncor Energy, pipeline companies TransCanada Corporation and Enbridge, plus the major fossil fuel industry associations and especially the Canadian Association of Petroleum Producers."
"Gutstein told the Straight that he believes Manley was groomed for his position as president and CEO of the Business Council of Canada because he would be well positioned to endorse a carbon tax as part of a grand bargain that would also ensure a Liberal government would include pipeline projects in any national climate plan."
(The Georgia Straight, Nov 14th, 2018)
In 2018, Trudeau's Liberal government purchased the Trans Mountain pipeline and its expansion project from Kinder Morgan for $4.5 billion to ensure TMX's completion. Costs soared. Taxpayers paid the bill for industry profits.
Once Big Oil got its pipeline, it no longer needed social licence. No more need for a carbon "tax".
The O&G industry has funded and waged a massive disinformation campaign against Canada's carbon "tax". Led by Poilievre's Conservatives, and aided by a web of right-wing think tanks, Postmedia, and groups working social media.
The Trudeau Liberals failed to promote or defend its carbon pricing system. The federal NDP also abandoned carbon pricing.
One might almost think that carbon pricing was always meant to fail. That once the pipeline was up and running, Canada's three main political parties always intended to scuttle and abandon the carbon tax ship. And that the Pembina Institute and the big ENGOs were in on the plan.
Grand theatre.
Geoff Dembicki: "How Trudeau's Broken Promises Fuel the Growth of Canada's Right" (The Tyee, 2019)
"The Liberal party plays on voters' desire for far-reaching transformation while guaranteeing the endurance of the status quo. The Liberals effectively act as a kind of shock absorber of discontent and anger towards the elite…
"So on climate, Trudeau was presented as this kind of river-paddling environmental Adonis. He promised that fossil fuel projects wouldn't go ahead without the permission of communities. But the Liberals create these public spectacles of their bold progressiveness while they quietly assure the corporate elite that their interests will be safeguarded. So at the same time Trudeau was going around the country and convincing people that he was this great climate hope, the Liberal party had for years been assuring big oil & gas interests that there would not be any fundamental change to the status quo.
"As early as 2013, Trudeau was telling the Calgary Petroleum Club that he differed with Harper not so much about the necessity of exporting huge amounts of tarsands internationally, but because he didn't think Harper's approach — which stoked divisions and an incredible amount of resistance that turned Canada into a climate pariah — was the most effective marketing approach.
"The LIBERAL CLIMATE PLAN ESSENTIALLY IS A REWORKING OF THE BUSINESS PLAN OF BIG OIL AND THE BROADER CORPORATE LOBBY. …The plan is to SUPPORT A CARBON TAX AND TO EFFECTIVELY MAKE IT A COVER FOR EXPANDED TARSANDS PRODUCTION AND PIPELINES. That was a plan hatched by the Business Council of Canada back in 2006, 2007. For 20 years oil companies had resisted any kind of regulation or any kind of carbon tax and fought it seriously. But they started to realize that it would be a kind of concession that they would have to make in order to assure stability and their bottom line not being harmed. The climate bargain that Trudeau went on to strike with Alberta of a carbon tax plus expanded tarsands production was PRECISELY THE DEAL THAT BIG OIL HAD WANTED."
Besides a new pipeline, the O&G industry reaps another huge benefit. In Canada specifically, consumer carbon pricing has become politically toxic for at least a generation. No political party, federal or provincial, will touch it.
If that was Big Oil's diabolical plan all along, it was brilliantly executed.
I am OK with this, and with throwing every other leftwing priority under the bus as needed to win this election. I was resigned to a Conservative half-decade or worse, the polls were hopeless.
But now, the polls are a fair chance if the liberals can somehow leverage the current panic (which is the perfectly correct reaction) to a few more percent.
And now, a conservative loss is of existential importance. I'm not sure how much they'd give away, but it would be too much - and might be everything.
We won't do anything about carbon, or about minority rights, or about income, or even health care; cons would use Trump as an excuse to ditch them all. So the liberals can throw a lot under the bus right now, if they must, to get those votes.
Even the progressive left is now abandoning carbon pricing. Small price to pay for keeping the Conservatives out of power.
Progressives fail to see that they are being duped.
There are two oil & gas parties in Ottawa — not just one.
For climate activists to focus their fear on the Conservatives — and give the Liberals a free pass is a fatal error.
The Liberals' climate plan is predicated on fossil-fuel expansion. A plan to fail.
A vote for the Liberals is a vote for failure on climate.
In fact, the Liberals and AB and BC NDP have proved far more effective than the Conservatives in delivering on Corporate Canada's agenda — and Big Oil's plan to fail.
The Conservatives are loud, crude, hostile, juvenile, ill-educated, disinformed, and clumsy. The Liberals just get things done. Service with a smile. Stealing your grandchildren's future and getting you to pay for it. And even vote for it.
Big Oil couldn't ask for a better setup. Terrified by the Conservative bogeyman, progressive voters run into the arms of Trudeau's Liberals/provincial NDP. CAPP can set their Conservative hounds on the Liberals/provincial NDP, while the petro-progressives give the O&G industry just about everything on its wishlist.
Federally, the Liberals play the fear card every election to limit the NDP and Green vote. The Liberals play a slick game, and progressive voters fall for it every time.