The federal government has finished its carbon price for consumers, and that is It is expected to drive savings in the gas pump. But what really did carbon tax and reimbursement for the weather? And now that it has gone, what impact that will have on emissions? Here is a closer look.
How were the tax and consumer carbon reimbursement supposed to reduce emissions?
The federal government’s carbon price, launched by the liberal government of Justin Trudeau in 2019, was applied in provinces that did not have their own carbon price.
I had two parts:
-
A surcharge or tax added to the price of carbon emitting fuels that would increase every year of $ 20 per ton of carbon in 2019 to $ 170 per ton in 2030. Until March 31, when it ended, what the 17.6 cents per liter was added to gasoline and 15.25 cents per cubic meter to natural gas.
-
Canada’s carbon reimbursement, based on family size, was paid four times a year to compensate for the cost, returning 90 percent of tax revenues. April’s payment will be received by the latest families.
That increased the price of carbon emitting fuel sticker, which intended to stop its use. “When something costs more people to use less … we find ways to be more efficient or adopt alternatives,” said Stewart Elgie, a professor of law and economy at the University of Ottawa.
These alternatives could include things such as an electric car, take traffic or cycling more, isolate your home or replace your oven with a heat pump.
Dave Sawyer, main economist at Canadian Climate Institute, and Stephen Gordon, professor of economy at the University of Laval, explain the influence of carbon tax on estimates that say that Canada is reducing the total carbon emissions once again.
Climate refund allowed the Government to increase the price of fuel without affecting the costs of people in general. But it also joined the incentive to reduce emissions, since people received payment even if they were not buying fossil fuels.
“The smaller, the more you get in your pocket,” said Elgie. “Those who reduced to the maximum earned money at the end.”
But was it really working?
Yes, according to a 2024 report by Canadian Climate Institute. He found that the price of carbon, both consumption and industrial, would play a “main role” in reducing emissions by 2030.
However, the price of industrial carbon It was projected that the impact of consumer carbon price will have three times. It was expected that the price of consumer carbon, or the fuel charge, reduced emissions by eight to 14 percent, compared to 23 to 48 percent for the industrial carbon price.
Dale Beugin, co -author of the report of the Canadian Climate Institute, said: “Somehow, losing the price of consumer carbon only emphasizes the importance of the industrial price of carbon, which is very important to comply with competitiveness and emission reductions.”
Liberals under the new leader Mark Carney have promised to maintain the industrial price of carbon if they are chosen in the next federal elections. However, conservatives under Pierre Poilievre have He promised to eliminate the price of industrial carbon if chosen.
Pierre Poilievre said a conservative government would end the industrial carbon and consumer carbon tax, a plan that defenders say that any possibility would also end that Canada reaches the objectives to reduce emissions.
In general, Canada’s emissions are Declution despite a growing economy. In 2023, Canada issued 694 megatons of carbon dioxide, 0.9 percent less compared to 2022 and a decrease of 8.5 percent compared to 2005, The Federal Government reported.
“We are finally seeing success in reducing our emissions and building a clean economy after decades of failure,” said Elgie. “And that is because our climatic policies are now working.”
Will the loss of consumer carbon tax cause Canada emissions to increase?
Not necessarily, according to Elgie and Beugin.
It depends partly on whether the government maintains its current climatic policies. They include Objectives for selling electric vehicles and a Clean fuel standards That could push consumers to electric vehicles even without carbon tax, said Beugin.
Pierre Poilievre has long said that a conservative government “would eliminate the tax,” confirmed that this includes reducing carbon industrial tax. This occurs a few days after Prime Minister Mark Carney took measures to eliminate consumer carbon tax. Chris Severson-Baker, executive director of the Pembina Institute, joins Power & Politics to discuss where policy changes leave the climatic objectives of Canada.
Elgie says that it also depends on whether the consumer carbon price is replaced by other climatic policies that generate equivalent emission reductions. Those could include subsidies for cleaner technology, such as EV and heat pumps, or regulations.
Carney has said that if chosen, it would replace the carbon tax with a Refund program to reward Canadians to buy products such as energy efficiency appliances, electric vehicles or better home insulation.
Elgie says that could help reduce emissions, but studies, including some of your own researchIt shows such subsidies could cost more than the price of carbon. The price of carbon is considered the cheapest and most efficient way to reduce emissions, since it is the most flexible and allows each person or company to choose the way to reduce emissions that work better for them.
Beugin said that reimbursements and subsidies for clean technology have been very successful in the US.
He says that the area that most needs emissions policies are buildings. “It is one of the sectors that remains incorrect in terms of emission reductions,” he said, suggesting that more could be done to improve energy efficiency and get away from burning fossil fuels for heat, such as the strictest construction codes.
While the drop in technology prices such as heat pumps can help, Beugin said the government still has a necessary role to play emissions.
“We are not going to meet our emission objectives as a country, political incentives in absence.”
