A Conservative government would repeal the entire carbon price law for consumers and big industry, Leader Pierre Poilievre said Monday on a visit to a steel mill in Eastern Ontario.
Poilievre's pledge comes three days after Prime Minister Mark Carney began the process to end the consumer carbon price by enacting a regulation to set the price charged on fuels like gasoline and propane to zero as of April 1.
Poilievre said that if the Liberals are serious about ending the charge, they would recall Parliament and do it through legislation. All three opposition parties have pledged to bring down the Liberal government at their earliest opportunity, and it is widely expected Carney will call an election before the House is set to resume on March 24.
To reduce emissions, Poilievre said his government would "expand eligibility" for the clean technology and clean manufacturing tax credits. He added his government would "reward" businesses that made products with lower emissions than the world average.
"While the Liberals tax businesses who use energy, Conservatives will cut taxes and boost incentives for those who bring down emissions; carrot not stick," Poilievre said.
The Liberals introduced the clean technology and clean technology manufacturing tax credits in the last two years to help drive investment to the production and operation of things like solar power, battery storage or manufacturing systems that make clean technology such as industrial robots that make electric vehicles.
Energy and Natural Resources Minister Jonathan Wilkinson called Poilievre's proposal "bad policy" from an environmental and economic perspective.
"(Mr. Poilievre) should actually have a look at what's happening with things like border carbon adjustments in Europe, where they are going to be looking at the carbon content in order to actually be able to have goods that actually are exported there," Wilkinson said.
"Otherwise, they're going to get tariffed. So, it's just so silly what he is proposing."
The European Union is planning to start charging importers a tariff next year on carbon intensive goods like steel if they come from a jurisdiction that lacks a carbon price.
The industrial pricing system applies to businesses that emit over 50,000 tonnes of carbon dioxide annually. Facilities that are below their emissions limit can earn credits that can be sold or saved for later use in more emission intensive periods.
Only Manitoba, Prince Edward Island, Yukon and Nunavut use the federal industrial pricing system.
Other provinces have their own carbon pricing schemes but they must meet the minimum requirements of the federal system, including the price charged per tonne of emissions. Right now, it is $80 per tonne and is scheduled to increase to $95 per tonne on April 1.
Poilievre said that provinces would be free to do what they want with an industrial carbon price, but there would be no more federal backstop.
A year ago, the Canadian Climate Institute published a report that said the industrial carbon price is expected to do more to reduce Canadian emissions between 2025 and 2030 than any other climate program — about 80 million tonnes a year by 2030, or almost one-third of what Canada has to cut to meet its current 2030 emissions target.
The consumer price was expected to eliminate less than 20 million tonnes by comparison.
Dale Beugin, Canadian Climate Institute executive vice president, said that the industrial price is the "most important" Canadian policy in terms of emissions reduction.
"The industrial carbon pricing systems, when they're working well, are on track to reducing three-times the emission reductions that the consumer carbon price is," Beugin said. "So in terms of the thing that matters more in terms of emissions reductions, these industrial carbon pricing policies are the biggest, most important elements of Canada's climate policy architecture."
Laurel Collins, the NDP's environment critic, said in a media state that regular Canadians pay for the brunt of climate change through dealing with floods and other disasters so it's "baffling" to offer oil and gas companies tax breaks.
"In the climate crisis and the fight for Canadian workers, we have to put workers first. We can create good jobs by investing in building an East-West energy grid for electricity transmission. We can fight the climate crisis and make big polluters pay," she said.
When asked about commitments to emission targets, Poilievre did not mention specific targets. Instead, the Conservative leader said the best way of encouraging global emission reductions is expanding Canadian industry.
"I don't think it is an achievement to shut down a Canadian steel mill, and then open one up in China that produces 10 or 20 times more emissions for each unit of steel. What we need to do is recognize the best way to reduce emissions is to bring home clean production here," Poilievre said.
Currently, the federal government's emission target under the Paris climate agreement is by 2030 to lower emissions to 40 to 45 per cent below what they were in 20025.
The longer-term goal is for a net-zero economy by 2050.
The Conservatives have also pledged to eliminate the emissions cap on oil and gas industry and legislation the Liberals passed to keep oil tankers away from British Columbia's northern coast.
This report by The Canadian Press was first published Mar. 17, 2025.
Comments
"A year ago, the Canadian Climate Institute published a report that said the industrial carbon price is expected to do more to reduce Canadian emissions between 2025 and 2030 than any other climate program — about 80 million tonnes a year by 2030, or almost one-third of what Canada has to cut to meet its current 2030 emissions target.
"The consumer price was expected to eliminate less than 20 million tonnes by comparison.
"Dale Beugin, Canadian Climate Institute executive vice president, said that the industrial price is the 'most important' Canadian policy in terms of emissions reduction."
The Canadian Climate Institute's 2024 "440 Megatonnes" report refers to future emissions reductions by 2030 based on modelled scenarios. The figures in the report are hypothetical and speculative, not historical or factual.
The low-end reduction of the LETS (-20%) is not much more than the high end of the fuel charge (consumer carbon tax).
The study by the Canadian Climate Institute (CCI) was widely reported, but not widely reviewed or fact-checked. No one questioned its assumptions. Climate journalists reported CCI's results at face value.
One paper based on modelling does not a fact make.
The future effectiveness of federal and provincial industrial carbon pricing schemes depends on the carbon market: the stringency of emissions-intensity thresholds, the value of carbon credits, and companies' demand for those credits. If there is a glut of carbon credits, their value will fall, reducing industry's incentive to cut emissions.
CCI: "These interactions, along with relatively weak emissions-intensity thresholds, risk creating a surplus of carbon credits in large-emitter trading markets, thereby reducing their price and making it cheaper to buy credits. The impact is weaker incentives to cut emissions and weaker effectiveness of LETS."
The effectiveness of consumer carbon pricing also depends on stringency. A low carbon price is ineffective.
To be effective, the price on carbon pollution needs to rise far higher:
"Secret briefing says up to $300-per-tonne federal carbon tax by 2050 required to meet climate targets" (National Post, Mar 30, 2017)
So it is not true that consumer carbon pricing is inherently less effective than industrial carbon pricing. The effectiveness of both programs depends on their design, coverage, and stringency. An incrementally increasing carbon price would be more effective as time goes on.
Meanwhile, the stringency of federal and provincial industrial carbon pricing leaves a lot to be desired.
In reality, Canada's industrial carbon pricing systems are the Swiss cheese of carbon policy.
Large emitters are subject to output-based pricing systems (OBPS), which price a fraction of total emissions, which effectively means a low carbon price on total emissions. Under Alberta's Technology Innovation and Emissions Reduction Regulation (TIER) pricing regime, major O&G companies pay pennies on the dollar in carbon costs.
The purpose of the OBPS and its provincial counterparts is not to expose heavy emitters to the carbon price, but to shield them from it, so they can remain competitive in global markets. Large industrial emitters, including in Alberta's oilsands, effectively pay a fraction of consumer rates. Under Alberta's Technology Innovation and Emissions Reduction Regulation (TIER) pricing regime, major O&G companies pay pennies on the dollar in carbon costs.
In Alberta, TIER dollars are effectively recycled back to industry to fund carbon capture technology and research. Projects industry should be paying for in the first place.
Federal and provincial industrial carbon pricing systems do not impair large industrial emitters' profits — or reduce their emissions.
Oilsands emissions do nothing but climb year after year.
The CCI seems not to have noticed.
"Canada's biggest emitters are paying the lowest carbon tax rate" (Corporate Knights)
"Oil and gas producers pay among the lowest average carbon costs of any sector…
"There's a patchwork of OBPS policies across the country, and some provinces have implemented 'weak' or 'non-existent' systems that have let many big polluters off the hook."
"...Ottawa and most provincial governments grant heavy exemptions to a number of sectors, including O&G, chemicals, cement, steel and mining.
"But generous exemptions mean that how much of a firm's actual emissions are taxed varies widely by province, and, on average, companies end up paying for only 16% of the carbon actually produced.
"[In 2020, Suncor's] average carbon cost was roughly $2.10 per tonne, about one-14th of the full carbon price."
"The impact of a carbon price is greatly lessened by the relatively small proportion of emissions that are actually covered by the price.
"The federal OBPS and AB's TIER system levy the carbon price on roughly 10% of a large emitter's GHGs. At a $50 marginal price, producers pay less than $1 per tonne of CO2 equivalent on their total production." (Corporate Knights)
"Canada needs to make Big Oil pay their fair share" (Corporate Knights, March 7, 2022)
As the PBO pointed out (May 2024), the industrial carbon price applies only to 20% of emissions maximum. 80% of emissions are exempt. For some industries, only 5-10% of emissions are exposed to the carbon price. (90-95% exempt.).
"Revisions to PBO's carbon tax analysis will 'vindicate' government, minister predicts" (CBC, May 29, 2024)
"Most big emitters pay the carbon price on anything they emit above 80% of what the average emissions are in their industry. … Industries that face more foreign competition, such as cement, lime and some fertilizers, have an even higher limit, 90 or 95% of the average.
["Facilities pay the carbon price only on emissions above that limit. If they're below that limit they get federal credits they can sell to other facilities that want to offset their emissions to avoid paying the carbon price.]
"… In Manitoba, Saskatchewan, Ontario, and New Brunswick, big emitters accounted for about 25% of total emissions in 2019, but paid less than 10% of the carbon levies collected. Consumers and small businesses paid the rest.
"… 'The current large emitter programs provide a perverse long-term incentive,' the [2021 Canadian Climate Institute] report said.
"'They are explicitly rewarding the most emissions-intensive facilities in the country to not make the major investments needed to be prepared to compete in a carbon-constrained market.'"
"Biggest industrial emitters don't pay fair share for pollution, critics say" (CP, April 14 2022)