Be prepared for a massive paradigm shift this year.
As the next federal election approaches, Canada’s climate policies are under the microscope and big changes are coming no matter who wins. Pierre Poilievre’s Conservatives and top Liberal leadership contenders Chrystia Freeland and Mark Carney are all talking about changes to the federal carbon tax so a broader climate policy review is underway.
At the centre of Poilievre’s platform is his promise to repeal the federal carbon tax, saying it costs Canadians without reducing emissions. Instead he’s advocating for a “technology, not taxes” approach, focusing on private sector innovation, industrial regulations and investments in carbon capture and liquefied natural gas (LNG) exports to replace coal globally.
Poilievre questions whether Canada can impact global emissions, his focus on regional autonomy and working with provinces could mean national climate standards are harder to implement.
Meanwhile the Liberal contenders are also moving away from the current carbon pricing framework. Chrystia Freeland, once a strong defender of the consumer carbon tax, has said she’ll scrap it if elected. She’ll replace it with a collaborative system developed with provinces, with industrial carbon pricing and making sure “big polluters pay”.
Freeland’s shift reflects growing recognition of voter fatigue with carbon pricing as affordability is the top of mind for voters.
Mark Carney, a former central banker and the UN’s Special Envoy for Climate Action, is taking a more measured approach. He says the consumer carbon tax has “served a purpose” but any replacement must be at least as effective.
Carney has hinted at a broader regulation-focused approach to reduce emissions while minimizing the financial burden on Canadians, he’s open to rethinking the Liberal government’s signature policy.
Both Freeland and Carney’s proposals fit with the growing trend among policymakers to focus on industrial emitters over consumer facing taxes.
A 2024 report by the Canadian Climate Institute found that only one-fifth of the emissions reductions from the carbon tax would come from the consumer portion, the rest from industrial pricing. This acknowledges the political reality of sustaining broad based carbon pricing while focusing on more targeted measures.
But critics warn that scrapping the consumer carbon tax without a clear alternative would stall progress. The carbon tax was introduced in 2019 and has reduced some emissions but not fast enough to meet Canada’s 2030 targets. Relying on regulations and incentives while politically popular could be more costly and complicated to implement.
Poilievre’s rejection of carbon pricing and his focus on LNG exports and technology will resonate with resource dependent provinces like Alberta and Saskatchewan. Freeland and Carney are trying to balance emissions targets with affordability but their plans are still in development.
In either case, Canada will be moving beyond the regime of climate policy that dominated politics for the last decade.