Carbon Tax, tug-of-war between Prime Minister and the premiers

TORONTO – The tug of war over the carbon tax continues between Prime Minister Justin Trudeau and the premiers of Canada: in a letter sent to the seven premiers asking for a stop to the imminent increase in the tax (on April 1st) – also to the Liberal premier of Newfoundland and Labrador, Andrew Furey – the Prime Minister writes that ““There are several factors that affect inflation. It is critical to dispel the misconception that Canada’s carbon pricing system is a significant driver of inflation — because that is demonstrably false. According to the Bank of Canada, the carbon price is only responsible for about 0.1 percentage points of annual inflation”. 

In the letter, published on social networks, Trudeau writes that the federal government is also concerned about the cost of living crisis and defends the carbon tax rebate system, and cites a report by the Parliamentary Budget Officer for March 2023 according to which 8 in 10 Canadians receive more than they pay. But Conservative leader Pierre Poilievre, when attacking the prime minister on the carbon tax, often cites the same report, which also provides a broader economic perspective that most Canadians are seeing a net loss due to declining employment and incomes from investments.

Then, in the letter, Trudeau – in light of the premiers’ appeal to at least keep the carbon tax at the current 65 dollars per tonne, renouncing the expected increase to 80 dollars per tonne – invites the prime ministers to develop alternative plans that meet the objectives of reducing emissions. “When we last engaged with provinces and territories on this in 2022, all of your governments either did not propose alternative systems or (with the exception of New Brunswick) proposed systems that did not meet the minimum standard for emissions reductions” Trudeau writes in the letter.

“However, we continue to remain open to proposals for credible systems that price pollution that reflect the unique realities of your regions and meet the national benchmark” he writes.

Meanwhile, the premiers of Saskatchewan, Alberta, New Brunswick and Nova Scotia have sent letters to the chair of the finance committee, Ontario Liberal MP Peter Fonseca, asking for the chance to present their case against the carbon tax increase before it comes into force. The premiers were then invited to take part in discussions on the government’s budget estimates at the operations committee, chaired by Alberta Conservative MP Kelly McCauley. The participation of the Premier of Saskatchewan, Scott Moe, was scheduled for today, via video conference. Danielle Smith of Alberta, Blaine Higgs of New Brunswick and Tim Houston of Nova Scotia have been called to participate tomorrow.

In the photo above, Prime Minister Justin Trudeau (from his Facebook page) and the leader of Conservatives, Pierre Poilievre