The consumer carbon tax is gone. How will that affect Canada's emissions?

Emily Chung · CBC News

· Posted: Apr 02, 2025 4:00 AM EDT | Last Updated: 10 minutes ago

The national authorities has ended its c pricing for consumers, and that's expected to lead to savings astatine the state pump. But what did the c taxation and rebate really bash for the climate? And present that it's gone, what interaction volition that person connected emissions? Here's a person look.

How was the user c taxation and rebate expected to trim emissions?

The national government's user c pricing, launched by Justin Trudeau's Liberal authorities successful 2019, was applied successful provinces that didn't person their ain c pricing.

 It had 2 parts: 

• A surcharge oregon taxation added to the terms of c emitting fuels that was to summation each twelvemonth from $20 per tonne of c successful 2019 to $170 a tonne successful 2030. As of March 31, erstwhile it ended, it added 17.6 cents a litre to gasoline and 15.25 cents per cubic metre to earthy gas.

• The Canada Carbon Rebate, based connected household size, was paid retired 4 times a twelvemonth to offset the cost, returning 90 per cent of revenues from the tax. The April outgo volition beryllium the past families receive. 

That boosted the sticker terms of c emitting fuels, which was intended to curb their use. "When thing costs much radical usage little of it … we find ways to beryllium much businesslike oregon follow alternatives," said Stewart Elgie, a prof of instrumentality and economics astatine the University of Ottawa.

Those alternatives could see specified things as getting an electrical car, taking transit oregon cycling more, insulating your location oregon replacing your furnace with a vigor pump.

WATCH | Carbon tax's relation successful Canada's 'modest progress' connected climate: 

The clime rebate allowed the authorities to summation terms of substance without impacting people's costs overall. But it besides added to the inducement to trim emissions, since radical received outgo adjacent if they weren't buying fossil fuels.

"The much you reduced, the much you came retired up successful the pocketbook," Elgie said. "Those who reduced the astir really made wealth successful the end."

But was it really working?

Yes, according to a 2024 study from the Canadian Climate Institute. It recovered that c pricing, some user and industrial, would play a "leading role" successful cutting emissions by 2030. 

However, the concern c terms was projected to person 3 times the interaction of the user c price. The user c price, oregon substance charge, was expected to chopped emissions by eight to 14 per cent, compared to 23 to 48 per cent for the concern c price. 

Dale Beugin, co-author of the Canadian Climate Institute report, said: "In immoderate ways, losing the user c terms conscionable emphasizes the value of the concern c terms — that it's hugely important for delivering connected competitiveness arsenic good arsenic emissions reductions."

The Liberals nether caller person Mark Carney person promised to support the concern c terms if elected successful the upcoming national election. However, the Conservatives nether Pierre Poilievre person promised to destruct concern c pricing if elected.

WATCH | Poilievre says helium would extremity concern c tax: 

Overall, Canada's emissions are declining contempt a increasing economy. In 2023, Canada emitted 694 megatonnes of c dioxide, down 0.9 per cent compared to 2022 and a alteration of 8.5 per cent compared to 2005, the national authorities reported.

"We're yet seeing occurrence successful lowering our emissions and gathering a cleanable system aft decades of of failure," said Elgie. "And that's due to the fact that our clime policies are present working."

Will losing the user c taxation origin Canada's emissions to spell up?

Not necessarily, according to some Elgie and Beugin. 

It depends partially connected whether the authorities maintains its existent clime policies. They see targets for selling electrical vehicles and a cleanable substance standards that could some nudge consumers toward electrical vehicles adjacent without the c tax, Beugin said.

WATCH | Where does scrapping c tax leave Canada's clime goals?:

Elgie says it besides depends connected whether the user c terms is replaced with different clime policies that make equivalent emissions reductions. Those could see subsidies for cleaner exertion specified arsenic EVs and vigor pumps, oregon regulations.

Carney has said that if elected, helium would regenerate the c taxation with a rebate programme to reward Canadians for buying products specified arsenic vigor businesslike appliances, electrical vehicles oregon amended location insulation.

Elgie says that could assistance chopped emissions, but studies, including immoderate of his ain research, amusement specified subsidies could outgo much than c pricing. Carbon pricing is considered the cheapest and astir businesslike mode to chopped emissions, since it is the astir flexible and allows each idiosyncratic oregon concern to take the mode to chopped emissions that works champion for them.

Beugin said rebates and subsidies for cleanable exertion person seen a batch of occurrence successful the U.S. But they're paid for by taxpayers, and they hazard being utilized to wage radical to bash things that they mightiness person done anyway, adjacent without the subsidy. 

He says the country astir successful request of policies to chopped emissions is buildings. "It's 1 of the sectors that's inactive going the incorrect mode successful presumption of emanation reductions," helium said, suggesting that much could beryllium done to amended vigor ratio and determination distant from burning fossil fuels for heat, specified arsenic tighter gathering codes.

While falling prices for exertion similar vigor pumps whitethorn help, Beugin said the authorities inactive has a indispensable relation to play successful driving down emissions.

"We are not going to present connected our emissions targets arsenic a country, absent argumentation incentives."