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Original article: https://theconversation.com/who-really-killed-canadas-carbon-tax-friends-and-foes-alike-252364
In his very first act as prime minister, Mark Carney did what critics had long demanded — he axed the federal carbon tax. Yet while Carney was the one who dealt the final blow, there were many who aided and abetted in its death.
Since it was first proposed nearly a decade ago, the Liberal government’s keystone climate policy, the consumer carbon tax, became the target of both legal and political attacks. Nevertheless, these attacks were held at bay thanks in part to the 2021 Supreme Court ruling that upheld the constitutionality of carbon pricing and the Liberals’ success in maintaining power.
The axing of the consumer carbon tax marks a major turning point in Canadian climate policy. It shifts the discussion from the effects of the fuel charge on household budgets to how to best compel large industrial emitters to reduce their climate impact in a swiftly evolving global trade context.
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The Liberals now propose instead a system of financial incentives for household-level purchases, while expanding the existing industrial pricing mechanism and potentially applying a carbon adjustment levy on imports from countries with lax environmental standards.
The Conservatives, on the other hand, are vowing to do away with the industrial carbon pricing system, promoting clean tech innovation and manufacturing through financial incentives at the producer level, and offering greater autonomy to the provinces to set their own climate policies.
Cost-effective, regressive
The death of the consumer carbon tax serves as a predictable political tragedy in the Shakespearean sense of the word: widely regarded by scholars and other experts as a cost-effective and non-regressive tool to further reduce the carbon emissions, the tax ultimately fell to relentless populist attacks when its original proponents and supporters caved to this pressure.
It’s useful to break down the various layers of support for — and opposition to — the tax to examine the role each played in its death.
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What the Supreme Court ruling on national carbon pricing means for the fight against climate change
The most obvious contributors involved the political opponents of the Liberal Party and critics of former prime minister Justin Trudeau. This included not only the federal Conservative Party and provincial Conservative premiers, but also the rising anti-Trudeau populism that manifested early on, even before the tax’s introduction.
These sentiments were seen in the Canadian Yellow Vests movement; “Wexit” and subsequently the so-called Freedom Convoy, which started as an anti-COVID-19 vaccine, anti-lockdown movement but morphed into a “carbon tax convoy” in the post-lockdown years.
The role of inflation
These populist movements were in part nourished by the Conservative Party under Pierre Poilievre after he became leader in 2022, and helped drive further support for the party in the years to follow.
Circumstantial factors — such as the global inflation crisis — played a key role too. By 2023, Poilievre capitalized on the first annual carbon tax rate increase to associate it with ongoing inflation, launching the widely popular “Axe the Tax” campaign.
This campaign, bolstered by a significant amount of misinformation, played a significant role in driving popular discontent with the policy.
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Former allies
In responding to this rising popular discontent, some of the federal Liberals’ allies and original supporters of carbon pricing also played a role in further weakening the policy.
For instance, sympathetic provincial premiers who in principle supported federal climate policy began to distance themselves from the carbon tax. In 2024, Manitoba’s NDP Premier Wab Kinew, British Columbia’s NDP Premier David Eby, Newfoundland and Labrador’s Liberal Premier Andrew Furey and New Brunswick’s Liberal Premier Susan Holt all made public comments seeking an end (or an alternative) to the carbon levy.
Yet the most significant loss of support from a former ally came when NDP Leader Jagmeet Singh withdrew the federal NDP from the supply-and-confidence agreement it made with the Liberals, citing concerns that the carbon tax was placing a burden on everyday working Canadians.
This withdrawal of support put the government on track for either a non-confidence vote or prorogation, which in turn fuelled an even further slide in voter support for the carbon tax.
Read more:
What does the end of the Liberal-NDP agreement mean for Canadians?
Party leadership
It was the Liberal Party’s own inside leadership circle that dealt the final blows to the tax.
Chrystia Freeland’s surprise resignation late in 2024 hastened Trudeau’s political downfall earlier this year. Both leading candidates to replace Trudeau — including Freeland herself and the eventual winner, Carney — centred their campaigns around bringing an end to the tax, noting how the policy was too divisive.
Yet the Liberal leadership also made several strategic missteps in recent years that contributed to the demise of the tax.
For one, the party’s 2023 exemption for heating oil undermined the credibility of the policy and gave rise to charges of regional favouritism. Similarly, the party’s consistently poor communications around the carbon tax rebate — including difficulties in properly labelling the reimbursement cheques sent to Canadians — was yet another self-inflicted wound.
Policy death
Six years after its introduction, the federal consumer carbon tax was scrapped — ironically by the very party that had championed it for years.
Yet the list of those who aided and abetted includes a secondary group of previous allies and other entities who in recent years publicly turned their backs on the carbon tax. That eroded public support for a policy that was already facing concerted attacks from Conservative political opponents and growing anti-Trudeau populism.
While the tax could conceivably be replaced by an equally effective tool, its repeal increases uncertainty about Canada’s ability to meet its already faltering international commitments to support climate change mitigation.
Ryan M. Katz-Rosene receives funding from the Social Sciences and Humanities Research Council of Canada.
