It’s unlikely that Alberta Finance Minister Nate Horner’s criticism of the federal carbon tax last week prompted the prime minister’s bizarre about-face the following day. But whatever the cause, the prime minister has handed a major political gift to Alberta’s government, not to mention his other political opponents.
In acquiescing to calls for a meeting of the nation’s finance ministers to discuss Alberta’s potential exit from the Canada Pension Plan, Horner added a few suggestions of other matters of interest that could be on the agenda. That included the federal carbon tax, which Horner described as continuing “to significantly increase the cost of living for every Canadian.”
Of course, the federal government has long rejected the argument that the carbon tax is contributing in any meaningful way to the cost-of-living crisis. That suddenly came to an end last Thursday.
With their political fortunes sinking in Atlantic Canada, Justin Trudeau announced a three-year exemption of the carbon tax on home heating oil. Trudeau also announced that the carbon tax rebate for those living in rural Canada would increase.
Now, the carbon tax exemption is not explicitly regional in nature. However, given that home heating oil is a non-factor outside of Atlantic Canada, it is most definitely a regional exemption in all but name.
The obvious disconnect this new policy creates was not lost on Alberta’s premier, who noted that she was “disturbed that same break will not be extended to Albertans and those from Saskatchewan and elsewhere in Canada who heat their homes with natural gas.”
It is most strange indeed that the carbon tax will not apply to the most emissions-intensive form of home heating but will still apply to other forms. For that matter, it is quite strange that barely a month before the much-hyped COP28 summit, the federal government chose to water down its central greenhouse gas emissions policy for nakedly political purposes.
It was also just a few weeks ago that the federal environment minister insisted that no province would be entitled to exemptions under federal environmental policy. Yet, it now appears that exemptions are very much a possibility, under the right (political) conditions.
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It’s also strange that the same day Trudeau was announcing the carbon tax exemption was the same day his environment minister was trying to explain how the government would be responding to the recent Supreme Court ruling that the Impact Assessment Act is unconstitutional.
So here we have a government that responds to an enormous Supreme Court defeat by undermining its own Supreme Court victory on the carbon tax.
In defending the constitutionality of its carbon pricing system, the government argued that it was essential to have a national approach. As one government lawyer put it, “one province’s refusal or failure to sufficiently regulate greenhouse gas emissions impacts Canada as a whole.”
Other considerations now seem to have taken precedence. But even those political calculations seem short-sighted and possibly counterproductive.
It’s not just that the Liberals are conceding that the carbon tax affects the cost of living; they’re acknowledging that not doing something about it sooner or more broadly was a deliberate policy choice, and nothing more. It’s hard to see how this helps them in the rest of the country.
Alberta can certainly make a strong argument now that Ottawa’s lack of flexibility in other areas, such as the Clean Electricity Regulations or the emissions cap on the oil and gas sector, is both deliberate and unnecessary. How can we believe any future claims or assurances from the federal Liberals that they are acting fairly or in good faith on these matters?
While Albertans might rightly grumble about this unfair double standard with regard to home heating bills, the Liberals torching their own credibility could end up helping Alberta’s cause in other ways.
“Afternoons with Rob Breakenridge” airs weekdays from 12:30 to 3 p.m. on QR Calgary