Playing defence on the carbon tax has put Trudeau's Liberals on the defensive
By allowing an exception for one type of home heating fuel, the government has painted itself into a corner
Jonathan Wilkinson, the minister of natural resources and energy, is not one to raise his voice. But as the Conservatives needled the government over its new carbon tax carve-out on Tuesday, Wilkinson started to get a bit shouty.
"Mr. Speaker, in the House, one thing is clear. The Conservative Party has no belief in the reality of climate change and no plan to fight it," Wilkinson said.
"This government is focused on ensuring that we are addressing affordability challenges in a thoughtful way, while concurrently addressing the climate issue. It is a shame in the House, it is a shame in the country that we have a political party that denies the reality of climate change and is willing to give up the future of our children."
Wilkinson, who was environment minister from 2019 to 2021, might have a good reason to feel frustrated. While the Conservatives are promising to do less (possibly much less) than the Liberals have on climate policy — Pierre Poilievre has vowed to completely repeal both the carbon tax and clean fuel regulations — Wilkinson and his fellow Liberals are the ones who spent the past week on the defensive.
But that's because the actual thoughtfulness of the government's policy agenda is now in question. A week after Prime Minister Justin Trudeau's announcement, it seems the Liberals may have only exchanged one problem for another that might be worse.
In defending their decision to exempt home heating oil from the carbon tax for three years — and expand a program that helps those who use heating oil to install electric heat pumps — the Liberals point out that oil is significantly more expensive than other forms of energy right now and is disproportionately used by those on low incomes. That means that those using oil are facing not only cost-of-living pressures, but might also have a hard time paying the up-front costs of installing a more efficient system.
Those facts do make the case for helping those households with the cost of a heat pump. They don't necessarily make the case for exempting those households from the carbon tax. By granting one exemption, the Liberals practically invited the questions and criticisms they've faced over the past week.
The perils of inconsistency
Policy experts were warning about the downside of applying the federal levy inconsistently even before the Trudeau government made the change for heating oil last week. Political opponents of Trudeau's climate agenda have since leapt upon the inconsistency with zeal, arguing that households who use natural gas should be entitled to the same break.
The choice to provide an exemption has also been held up as proof that, contrary to the Liberal government's arguments about the carbon tax rebate, the tax is imposing a significant burden on households.
Public policy is not always perfectly logical. A government changing course, or even reversing itself, isn't necessarily a sin. And the internal pressure to do something about the carbon tax might have been immense.
But the Liberal response to concerns in Atlantic Canada has made it harder for them to directly rebut the arguments now coming at them from other directions.
Despite speculation that the Liberals will end up having to carve other pieces out of the carbon tax, Trudeau has publicly ruled out further exemptions. Drawing an even brighter line, Steven Guilbeault has said there will be no more exemptions as long as he is environment minister.
The Liberals could try to simply ride out the political storm. And their political opponents might even make that easier by overplaying their own hands — as Saskatchewan Premier Scott Moe seems to have done by vowing that he'll order Saskatchewan's natural gas utility to refrain from collecting the federal carbon tax.
Or the Liberals could try to undercut the cries of unfairness by heeding the NDP's call to remove the GST from home heating bills, or by extending the heat pump affordability program to cover households that use natural gas and propane.
But the Liberals might have been better off making those moves instead of granting an exemption — not least because the carbon tax might not be a significant part of the problem the Liberals are (theoretically) trying to solve.
"Many Canadians are struggling [but] they're struggling not because of the carbon tax," Mark Carney, the former governor of the Bank of Canada, said at a climate policy conference in Ottawa this week. "They are struggling because of broad increases in energy prices and food prices, the impact on wages, the uncertainty that also is there, the lingering effects of COVID as well."
Throwing something overboard doesn't fix a leaky boat
Maybe that's easy for Carney to say when he doesn't have constituents or a caucus to worry about. But maybe it's something Liberal ministers and MPs should have been saying more loudly over the past year.
It's indisputable that the Liberal boat has taken on water over the last several months. But instead of simply plugging the leak, they've thrown something (or part of something) overboard. Maybe that bought them some time, but it's not clear that they're much further ahead.
Critics and commentators are also particularly primed now by opinion polls to portray Trudeau as a desperate and flailing prime minister trying to save himself and his government. For their own sake, the Liberals should be trying to make it harder to write that story, not easier.
On Thursday, Poilievre taunted Trudeau with the names of Carney and former environment minister Catherine McKenna — two prominent Liberals who have now publicly disagreed with the exemption for heating oil. He suggested Trudeau's leadership was in danger and challenged the Liberal side to support a Conservative motion that called for the carbon tax to be removed from all home heating bills.
In response, Trudeau framed the government's actions in terms of phasing out the use of heating oil, emphasized that the use of heating oil is not exclusive to Atlantic Canada and expressed a hope that other provinces will work with the federal government to help households acquire heat pumps.
"The leader of the Opposition is making a serious mistake if he thinks that Canadians are not concerned about the environment, or that Canadians don't know that protecting the environment does go hand-in-hand with creating good jobs and prosperity for them across the country," Trudeau said. "That is a conversation I look forward to continuing to have over the next two years with Canadians."
That conversation has never been easy, as Trudeau well knows. But it's not clear whether the Liberals have made it any easier for themselves.
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