Trudeau challenges premiers opposed to carbon tax hike to suggest alternatives to federal levy

Prime Minister Justin Trudeau is calling on premiers opposed to increasing the carbon tax to propose credible alternatives to the federal measure.

On Tuesday, Trudeau wrote to seven premiers who have been calling on Ottawa to pause an imminent hike to the federal levy or scrap the program altogether.

In his letter, the prime minister suggested that the governments of New Brunswick, Prince Edward Island, Saskatchewan, Alberta, Ontario, Nova Scotia and Newfoundland and Labrador haven’t put forward suitable replacements to the federal backstop.

“When we last engaged with provinces and territories on this in 2022, all of your governments either did not propose alternative systems or … proposed systems that did not meet the minimum standard for emissions reductions,” the letter reads.

The federal policy — which includes both a tax on fossil fuels and rebates paid directly to households — was introduced by the Liberal government in 2019. It’s designed as a financial incentive to encourage people and businesses to cut their consumption of fossil fuels and transition to greener forms of energy.

Canadians living in the eight provinces where the federal carbon tax applies receive quarterly rebate payments which vary depending on the province and the size of household.

In his letter, Trudeau pointed out that Quebec, British Columbia and the Northwest Territories all have their own systems and are not subject to the federal tax.

“We continue to remain open to proposals for credible systems that price pollution that reflect the unique realities of your regions and meet the national benchmark,” he wrote.

The carbon price is scheduled to increase from $65 to $80 per tonne on Monday.

Four premiers — including Danielle Smith of Alberta, Saskatchewan’s Scott Moe, Nova Scotia’s Tim Houston and Blaine Higgs from New Brunswick — have written to the House of Commons finance committee asking to appear and speak about the carbon tax. Moe is set to appear before the committee on Wednesday.

Federal Conservative Leader Pierre Poilievre has vowed to scrap the tax if he forms a government after the next election.

The Conservatives released a statement Tuesday supporting the idea of premiers appearing at committee.

“Conservatives believe that Parliament has a duty to listen to Canadians on matters of national importance,” the statement said.

Poilievre has also been ramping up pressure on the government to stop what he calls the government’s “April Fools’ tax hike.”

The Conservatives put forward a non-confidence motion on the carbon tax in the House last week that, if passed, would have toppled the Liberal government and forced an election. The Liberals survived the vote with support from Bloc Québécois and NDP.

Economists defend policy

Trudeau’s letter to the premiers comes after more than 100 economists signed an open letter defending the carbon tax policy.

“There is plenty of discussion about carbon pricing in Canada today. Healthy public debate is good, but it should be based on sound evidence and facts,” the letter reads.

The economists argue that a carbon tax is the cheapest way to lower greenhouse gas emissions. 

“Unfortunately, the most vocal opponents of carbon pricing are not offering alternative policies to reduce emissions and meet our climate goals. And they certainly aren’t offering any alternatives that would reduce emissions at the same low cost as carbon pricing,” the letter says.