Prime Minister Justin Trudeau suspended a carbon price on oil used for home heating, bowing to political pressure in Canada’s eastern provinces just months after the tax came into effect.
Oil is used to to heat a small fraction of Canadian homes, but it’s a more important energy source for the Atlantic region’s 2.6 million residents. Trudeau said the three-year pause on the pollution levy will give those people time to switch over to electric heat pumps.
“We are switching to heat pumps off home heating oil, as a region in Atlantic Canada and as a country,” Trudeau said on Thursday.
The announcement represents a partial climbdown on one of Trudeau’s signature climate policies. Trudeau’s Liberal Party has been sinking in the polls — partly because of the rising cost of living — and energy costs are one reason it appears politically vulnerable in Atlantic Canada, where the federal carbon price just came into effect this summer. His chief rival, Conservative Leader Pierre Poilievre, has been drawing crowds with “Axe the Tax” rallies in the region.
The Liberals hold 24 of the 32 House of Commons seats in Canada’s four easternmost provinces.
Trudeau also announced a pilot project in the region to install free heat pumps for people with incomes at or below the median. The government will increase the size of carbon rebate checks for people living in rural Canada.
“If you live in a rural community, you don’t have the same options that people who live in cities do. We get that,” the prime minister said. “So this is more money in your pocket to recognize those realities even as we continue to fight climate change and build a stronger economy.”
Trudeau’s government began implementing the carbon price in 2016 to give people incentives to reduce fossil fuels. He insisted on Thursday the three-year suspension would help his government reach its climate goals, because it would help people afford the move to heat-pump technology.
However, Dale Beugin, executive vice-president of the Canadian Climate Institute, said the move introduces uncertainty to Canadian climate change policy. “It sends the signal to emitters — and investors — that policy can be weakened in the future, diluting the carbon price’s effectiveness in driving the long-term, low-carbon investments required to reduce emissions,” he said in a statement.
