Prime Minister Justin Trudeau has announced a three-year pause on the carbon tax on heating oil and more subsidies for Canadians to switch to electric heat pumps. This adjustment in policies is aimed at achieving the desired outcome, according to Mr. Trudeau during a press conference on Oct. 26.
The temporary pause on the fuel charge on heating oil for homes and small businesses will begin in 14 days, applying to all jurisdictions where the federal fuel charge is in effect. The Liberals estimate that the pause will save an average household that uses heating oil $250.
Starting in April 2024, the Climate Action Incentive Payment rural top-up rate will be doubled from 10 percent to 20 percent of the baseline amount Canadians receive as part of their quarterly carbon price rebates. This increase in payment is meant to acknowledge the limited options rural communities have compared to those living in cities when it comes to alternative heating sources.
The federal carbon tax, which applies to provinces and territories without their own carbon pricing systems, is currently set at $65 per tonne of emissions and will increase by $15 every year until 2030. Households in the provinces receive carbon rebates to offset the costs they incur.
The federal carbon tax has faced controversy, with a September Ledger poll indicating that 55 percent of Canadians believe the tax should be reduced or eliminated. In Canada’s Atlantic provinces, where 30 percent of homeowners still use furnace oil for heating, the tax has been particularly unpopular.
Liberal MP for Newfoundland and Labrador Ken McDonald has voted in favor of repealing the tax, and Newfoundland and Labrador Premier Andrew Furey has requested an exemption for home heating oil. Acknowledging the concerns of Atlantic Canadians, Mr. Trudeau emphasized the need for adjustments to ensure the effectiveness of the pollution price for everyone.
Conservative Leader Pierre Poilievre responded to the announcement by criticizing the prime minister’s flip-flopping on the carbon tax and questioning its value. He is holding an “Axe The Tax” rally in Windsor, N.S., to voice opposition to the policy.