What’s going on with Canada’s carbon tax?

Marcela Gonzalez • Apr 5, 2024

The carbon tax aims to charge big polluters for their emissions (Jan Antonin Kolar/UNSPLASH)


The carbon tax went up on Monday, despite conservative protests. 

The 23 per cent increased caused commotion on Parliament Hill two weeks ago, when Conservative Party leader Pierre Poilievre called a non-confidence motion over the hike to dissolve the current government. 

Conservative Party leader Pierre Poilievre (House of Commons Canada)

A non-confidence motion asks members of Parliament to vote on whether they have confidence in the current government or not. Poilievre’s motion failed on Thursday, but had it passed, it would have meant the loss of power for the Liberal Party and the instigation of an election. 

This motion came after Prime Minister Justin Trudeau affirmed he wouldn’t back down on the increase. 

However, Poilievre isn’t the only one seeking to stop it. Seven out of the eight provinces under the carbon tax have asked the federal government to drop the hike, including Ontario. 

The ‘Nationwide Protest against Carbon Tax’ group on Facebook has over 150,000 members and planned protests on the borders of affected provinces and in front of Parliament. 

But what is this tax? And what is each side arguing? 

According to Environment and Climate Change Canada, carbon pricing is a way to recognize the costs pollution has on the public and shift them towards the ones responsible for carbon emissions. 

This means that the original emitters are charged for the costs of healthcare for ailments that can arise from heat waves, or those affected by property loss from rising sea levels. This policy comes as an effort to push polluters to reduce their emissions. 

Prime Minister Justin Trrudeau (Justin Trudeau/X)

This can be done by either a cap-and-trade system, or a carbon tax. 

The cap-and-trade system is basically a market for carbon emissions, in which companies buy and sell emission units and trade permits. 

Whereas a carbon tax is a fee imposed by the state to companies that burn or distribute fossil fuels, resulting in higher prices for gasoline or heating oil.

In Canada’s case, big decisions needed to be made after committing to reducing greenhouse gas emissions by 30 per cent from 2005 levels by 2030. So, Justin Trudeau’s government released a national carbon pricing plan in 2016 requesting all provinces and territories have a carbon pricing system in place. 

Some provinces like B.C. and Quebec already had systems achieving the requirements set by the feds. But for those that didn’t, Ottawa laid out a carbon tax in 2019. 

This tax started at $10 per tonne each year, until it reached $50 in 2022. Since then and until 2030, this number has increased by $15 each year. 

That number roughly translates to an increase of about three cents per litre of gasoline per year. 

This carbon pricing plan has come with a lot of opposition, with contenders claiming it hasn’t made a meaningful difference on the decline of GHG emissions. They argue it will only add to the current inflation and burden Canadians with more taxes. 

In response, the Liberal Government mentions the Canada Carbon Rebate payments, which are a part of the carbon pricing plan. This is a fixed amount of money the federal government gives back to households affected by the tax every quarter, with lower-income families benefiting the most. 

So instead of imposing “more misery and suffering on Canadian people,” as Poilievre said in debate last week, over 80 per cent of Canadians received more money back than what they’d paid in tax through this program, according to a 2020 report by the Parliamentary budget officer. 

Regardless of who is right, the only thing for sure is that tensions are high between parties, and the tax will go up as planned. 

As to what happens with the annual increase after the 2030 goal post, the Environmental Climate Change Minister Steven Guilbeault told CTV News they haven’t made any decisions. 


Listen to this story as told on CHUO’s weekly show The Mosaic: