Changes are coming to Canada’s carbon tax — at least for consumers.
Starting April 1, the federal fuel charge will be set to zero, removing the extra tax we pay on gasoline, diesel, natural gas, and home heating oil in provinces where it applied. But that doesn’t mean carbon pricing is gone entirely.
With affordability top of mind for many households, our research shows engaged women have concerns about the effect carbon pricing has on their daily lives and standard of living. That’s why we’re taking a closer look at what’s changing, how it’s being done, and what it means going forward.
What changed with carbon pricing
Headlines suggest the carbon tax is dead, but technically that isn’t the case. Instead, the tax rate was set to zero, but the law allowing it still exists.
To fully repeal the law Parliament would need to pass new legislation. Because our Parliament is prorogued at the moment, the government used something called an order-in-council, a tool that lets it adjust the rate without changing the law. So technically, the consumer carbon tax is now zero but the law remains.
The Canada Carbon Rebate also comes to an end
Another key change is the end of the Canada Carbon Rebate, which was meant to return most of the carbon tax money to households. With the fuel charge now set to zero, the government is phasing out the rebate too. The final payment will be issued starting April 22, so if you’ve been receiving a cheque or direct deposit, it will stop after that.
Industrial carbon pricing remains
While the consumer fuel charge is set to zero, the industrial carbon price remains.
This part of the policy applies to businesses and industries such as manufacturing, oil and gas production, and mining. Instead of paying a fuel charge like consumers did, these companies are taxed based on the amount of carbon emissions they produce.
- The Government’s position: Prime Minister Mark Carney said he’s keeping the industrial carbon price with plans to increase it because he wants policy that incentivizes reducing emissions.
- Opposition’s view: Conservative Leader Pierre Poilievre has pledged to remove the industrial carbon price entirely if elected. He said taxing emissions increases costs for businesses, which can lead to higher prices for consumers, job losses, and reduced competitiveness in industries like manufacturing and natural resources.
Here’s an overview of each party’s stance.
Energy policy has short and long-term effects on both costs and sustainability. We’ll continue to follow these developments and provide insights to keep engaged women informed.
Let us know what you think — how does this policy shift affect your household and your view on Canada’s economy and energy future?
—
Canada Powered by Women bulletins are short, fact-based updates on key issues that matter to engaged women. Expect them when there’s a major development worth knowing about.