Environment minister open to replacing carbon tax if Canada can still meet its climate goals

January 21, 2025 Canuck

Environment Minister Steven Guilbeault said he is open to replacing the carbon tax he has long defended if Liberal leadership candidates propose new measures to help Canada achieve its climate targets.

Guilbeault, a staunch advocate of consumer carbon pricing, did not call for an end to the controversial measure. However, he told reporters on Monday that he has been discussing alternatives with candidates in his party’s leadership race if they decide to abandon it.

“Our plan to fight climate change is much broader than just one measure,” Guilbeault said.

“There are about 100 different measures we have deployed to fight climate change in Canada. The consumer carbon pricing element is an important element. But it is not the only one.”

Guilbeault noted that industrial carbon pricing in Canada achieves three times the emissions reductions of consumer carbon pricing.

“I am talking to all of the candidates to say, OK, if we are not moving ahead with this particular element, what it is you will put in place to ensure that Canada can continue to fight climate change and to make sure we can reach our 2030 targets?” Guilbeault said.

Several candidates in the Liberal leadership race are distancing themselves from the carbon tax. Chrystia Freeland confirmed on Sunday that she’ll ditch the policy. Ontario MP Karina Gould committed to pausing a scheduled increase in April, but would not repeal the policy that has been a target of the Conservatives.

Although Mark Carney did not specifically say what he would do, the former Bank of Canada governor said he would present a plan. Guilbeault announced Tuesday that he is endorsing Carney in the leadership race.

Analysis from the federal government and independent research shows it is a small player relative to the other climate policies.

Minister of Environment and Climate Change Steven Guilbeault joins Minister of Energy and Natural Resources Jonathan Wilkinson and fellow colleagues as they hold a press conference in Ottawa on Monday, Nov. 4, 2024. Oil and gas producers in Canada will be required to cut greenhouse gas emissions by about one-third over the next eight years under new regulations being published today by Guilbeault. THE CANADIAN PRESS/Sean Kilpatrick — Minister of Environment and Climate Change Steven Guilbeault is not calling for the consumer carbon tax to be scrapped, but he said he would support replacing it with a different policy. ( THE CANADIAN PRESS/Sean Kilpatrick)

Industrial carbon pricing, the oil and gas emissions cap and methane regulations play a more significant influence on achieving Canada’s climate targets, according to the policy research organization, the Canadian Climate Institute.

“There’s actually a complete mismatch between the amount of oxygen that the debate surrounding the consumer carbon price sucks out of the room and its actual importance when it comes to making a dent with the greenhouse gas emissions,” said the institute’s president Rick Smith.

Its analysis shows the carbon tax accounts for between eight and nine per cent of the emissions reductions in 2030.

Large emitter trading systems or industrial carbon pricing account for much more reductions — between 23 and 39 per cent of the avoided emissions.

Getting rid of the carbon tax would leave a gap in Canada’s emission reduction plan. Still, Smith said there are other ways to close that gap, like strengthening existing federal climate policies or provinces doing more.

“It’s important that we not let other governments off the hook. [There are] things that need to happen at other levels of government across the country,” Smith said.

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