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Carbon tax's future uncertain as Parliament returns

New Democrat Party Leader Jagmeet Singh. File photo by Cole Burston 

On the last day of the NDP caucus retreat, leader Jagmeet Singh took swipes at the climate records of his top opponents, setting the stage for an intense battle over climate policy as politicians return to the House of Commons next week. 

Speaking to reporters in Montreal on Thursday, Singh criticized both the Liberals and the Conservatives over their strategies to address climate change. He accused Conservative Party Leader Pierre Poilievre of wanting to give big polluters free rein to poison the water, air and land. Meanwhile, Prime Minister Justin Trudeau’s Liberals are playing politics, pitting workers against each other by offering “advantages” to Atlantic Canada not enjoyed by other regions, he said, referring to last year’s decision to pause the carbon price on home heating oil.

"We want to see an approach to fighting the climate crisis where it doesn't put the burden on the backs of working people, where big polluters have to pay their fair share," Singh said. "And so we've been working on a plan, and we'll be releasing our plan, our vision for how we can do that in a stronger way, in the coming months." 

Singh did not say if the NDP’s plans will include a carbon price, as its 2021 platform did, but emphasized that he believed the burden of paying for climate action should rest with big polluters rather than regular Canadians. Despite the vague statement, some media outlets took this as a signal that the NDP will oppose the carbon tax. 

An NDP staff member speaking to Canada’s National Observer said those suppositions are “inaccurate,” and that Singh wasn’t implying anything. Nonetheless, Singh’s comments confirm that not only is the supply and confidence agreement firmly in the rearview mirror, he intends to put some distance between the NDP and Liberals as politicians return to the hill. 

Environment and Climate Change Minister Steven Guilbeault was quick to call out the NDP for softening its stance on carbon pricing.

“True leadership is often shown when the going gets tough,” said Guilbeault on social media following Singh’s comments, calling it “disappointing” to see the NDP “cave to Pierre Poilievre and the Conservatives misinformation and disinformation campaign on carbon pricing.”

Poilievre continues to beat the carbon tax drum, announcing this week he intends to introduce a non-confidence vote to trigger a “carbon tax election” at his earliest opportunity. 

“My message to Singh and the NDP is ‘put up or shut up,’ either commit today to supporting a non-confidence motion or admit he has sold out again,” Poilievre said Wednesday. 

“I think the question for the NDP here is: does it want to compete on Pierre Poilievre's terrain on who is the most stoked about axing the tax?... Or does it want to create its own alternative playing field, laying the blame where it belongs?"

Caroline Brouillette, executive director of Climate Action Network Canada, told Canada’s National Observer that it’s good to hear the NDP wants to make big polluters pay their fair share, but said until the party puts forward a climate plan, it’s not helpful to “sow confusion” or “scapegoat carbon pricing.”

“I think the question for the NDP here is: does it want to compete on Pierre Poilievre's terrain on who is the most stoked about axing the tax?” she said. “Or does it want to create its own alternative playing field, laying the blame where it belongs, and going after the real culprits — the oil and gas companies who are causing price hikes [and] making record profits while burning our country down?”

The federal carbon price has two primary dimensions. 

First, there is the consumer-facing fuel charge (commonly called the carbon tax) which includes a tax on each tonne of carbon pollution that increases each year. The tax increases to make greenhouse gas intensive products steadily more expensive to incentivize cleaner investments (like switching from a gas furnace to a high efficiency heat pump). The federal government rebates money collected through the tax back to most Canadians. 

Economic analyses indicate about 80 per cent of Canadians receive more money back in rebates than they pay in taxes. A family of four in provinces that have the federal carbon price in place receive quarterly payments of $190 to $450, on average, depending on the province.

Then there is an industrial carbon price, where large emitting companies pay a tax for each tonne of carbon above a certain threshold to incentivize long term investments in decarbonization. Companies that emit below the threshold are granted credits they can then sell. 

The industrial price is the federal government’s emissions reduction workhorse. The consumer carbon price is expected to drive between 8 and 9 per cent of emission reductions by 2030, while the industrial carbon price is expected to be responsible for 23 to 39 per cent of emission reductions by 2030, according to the Canadian Climate Institute.

Speaking to Canada’s National Observer on the condition of anonymity, an NDP MP said the party is not yet ready to discuss the carbon price publicly, but is weighing its options. According to the source, the party recognizes that Conservatives have effectively misrepresented the policy to Canadians, and turned people against it. The source also said the Liberals have struggled to try to explain to the public how a tax they pay somehow gives them more money back while also solving the climate problem. 

“Economists love it because in a vacuum, and on paper, it looks to them like the most efficient way to reduce emissions, but when you expose it to the harsh realities of populist politics it has a pretty tough run,” the source said, adding that the industrial carbon price is more important. 

“The understanding of climate policy today is very different than it was ten years ago, and so we're looking to put forward an offering that maximizes the mutual benefits of climate action and affordability, and makes people's lives better,” they added. 

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