Prime Minister Justin Trudeau wrote a letter to the four premiers who asked to make a case for axing the carbon tax before a federal committee. In his letter, Trudeau said he aimed to dispel the misconception that Canada’s carbon pricing system drives inflation, claiming it was “demonstrably false.”
He added that the Bank of Canada has said the carbon price is only responsible for 0.1% of annual inflation. However, True North previously reported inconsistencies in the Bank of Canada’s projections regarding the carbon tax’s influence on inflation. When Saskatchewan stopped collecting its carbon levy, its inflation fell by 0.8% the following month. When Manitoba stopped collecting its fuel tax, its inflation fell by 0.9% the next month.
Trudeau said in his letter that “eight out of ten families get more money back than they pay — with low- and middle-income households benefitting the most.”
True North has reported numerous times that the Parliamentary Budget Officer’s study shows that the carbon tax cost the average family $710 more than they received in rebates in 2023-24. The cost will balloon to $2,773 by 2030-31.
Trudeau said that rebates are about to go up, but so will the carbon tax when it increases by 23% on April 1. Protests to this increase are planned across the country.
The prime minister also stated a price on pollution is the key to any serious plan to combat climate change.
“It is the most efficient way to reduce emissions across the economy — from industry to transportation to buildings and businesses,” he said.
Premiers from Alberta, Saskatchewan, Nova Scotia, and New Brunswick each individually wrote letters to the House of Commons finance committee asking to testify, urging the federal government to axe the carbon tax increase on April 1.
While they didn’t get their wish to testify before the finance committee, some will testify before the committee on governance operations and estimates.
Saskatchewan Premier Scott Moe already testified before the Standing Committee on Governance Operations and Estimates on Wednesday. He said that since 2015, Saskatchewan has reduced fuel emissions by 65%.
“We are making every effort to reduce our footprints, and we’re doing it and can do it without a federally imposed carbon tax,” said Moe.
While having not yet testified, Alberta Premier Danielle Smith has been very vocal in opposition to the carbon tax and its upcoming increase.
She said that even Environment Minister Steven Guilbeault claimed that the carbon tax would have no impact until 2060. “So, they’ve even acknowledged that their carbon tax is not working,” she added.
Smith explained that one of the biggest flaws of the carbon tax is that it gives no rebates to small businesses, who subsequently have to add the additional cost to everything they sell, further fuelling inflation.
“Keep in mind how bad this is; when the fuel tax on natural gas goes up on April 1, it’ll be over $4 a gigajoule. Gas right now is selling at, I believe, $1.72 a gigajoule. So the tax is more than double what people are paying for the base price of fuel,” said Smith.
She provided numerous examples of how Alberta could work towards carbon neutrality without a carbon tax. She said that four premiers testifying from both sides of the country could hopefully have an impact on the committee.
In Trudeau’s letter, he boasted that Canada is on track to meet its climate target for the first time ever.
April 1 will see the carbon tax increase from $65 to $80 per tonne of carbon dioxide emitted. True North previously reported that a “compulsory” carbon price of over $350 per tonne would be required for the federal government to reach its net-zero goals by 2050.
Trudeau added that he was happy to hear from provinces if they were able to provide him with alternative systems that met the minimum standards for emissions reductions.
Smith argued that Alberta has already offered a better climate action plan, which would result in carbon neutrality being reached by 2050 by reducing industrial emissions.
“There was a recent report that said it’s these kinds of major industrial emissions reduction projects that are having an impact, and carbon taxes aren’t,” said Smith.
Smith will testify before the committee on government operations and estimates tomorrow morning, following New Brunswick Premier Blaine Higgs, who will testify an hour before. Moe has already testified, and it is unclear when or if Nova Scotian Premier Tim Houston will.
