A shed sits at the side of a house, containing home heating oil, in Halifax, Tuesday, Nov. 21, 2023. THE CANADIAN PRESS/Michael MacDonald
OTTAWA – A new poll suggests Canadians are broadly in favour of the federal government’s decision to exempt home heating oil from its price on carbon, and would welcome expanding the relief to all forms of home heating fuel.
The governing Liberals announced last month a three-year reprieve from the carbon price for property owners who depend on heating oil, along with funding to help people make the switch to electric heat pumps.
The abrupt about-face from a government that considers tackling climate change a cornerstone priority triggered an uproar in Ottawa over a controversial measure that has proven politically useful on both sides of the aisle.
Climate activists denounced the reprieve as a short-sighted move that risks doing permanent damage to the Liberal government’s efforts to limit the impact of climate change.
Conservative Leader Pierre Poilievre, meanwhile, has vowed he would do away with the carbon price altogether as prime minister, rallying supporters at events across the country with cries of “axe the tax.”
Just over half of respondents to the online Leger survey said they knew about the carve-out, while 48 per cent said they were not aware of it.
Despite that, 63 per cent said they support the decision and only 37 per cent said they were opposed to it. Support was highest among those under age 44.
The poll also suggests most people would be happy to see all forms of home heating fuel exempted : 70 per cent of respondents said they support an expansion, although that dropped to 58 per cent among people under 25.
More than 1.2 million Canadian homes use home heating oil, according to Natural Resources Canada, and about a quarter of those are in Atlantic Canada. Almost a third of Atlantic Canadian homes rely on heating oil, meaning the policy has a disproportionate impact in that region.
The Liberals have been accused by their critics of trying to save votes in Atlantic Canada.
Some 78 per cent of Atlantic Canadians who took part in the survey said they were happy about the move. Opposition was highest in Quebec, where 43 per cent of respondents said they disagreed.
Albertans were most likely to support an expansion to all home heating fuel, at 78 per cent, while 40 per cent of Quebec respondents felt the opposite.
Asked about their grasp of the carbon pricing mechanism overall, about 44 per cent expressed a somewhat good or very good understanding, while 56 per cent said they understand it poorly or not at all.
Men were more likely to say they understand the carbon price than women.
Leger surveyed 1,531 people online, asking a range of questions about the carbon price. Online surveys cannot be assigned a margin of error because they do not randomly sample the population.
OTTAWA – A Conservative private member’s bill to exempt more fuel used by farmers from the carbon price is stirring up intense lobbying efforts in the Senate, and leaving the Liberals on the verge of being forced to carve up their signature climate policy even more.
Alberta Sen. Paula Simons said that the effort to convince senators of how to vote on this bill is extreme from both sides of the debate.
She said she’s concerned that rhetoric is outpacing reality in every direction.
“I’ve never been lobbied like this on private member’s bill,” Simons said in an interview with The Canadian Press. “This bill has become symbolic and it’s being used as a wedge issue.”
Conservative Leader Pierre Poilievre, who has already made eliminating the carbon price the centrepiece of his political messaging ahead of the next federal election, has launched a full-on campaign to get the bill passed. That includes new ads launched on Wednesday.
The premiers of Alberta, Saskatchewan and Ontario all wrote letters to senators asking them to vote in favour of the bill.
Environment Minister Steven Guilbeault has reached out to some senators himself, seeking to push the government’s reasons for not wanting the legislation to pass.
Simons said senators are receiving hundreds, if not thousands, of emails about it, most of them sent by bots.
Bill C-234 was introduced by Ontario Conservative MP Ben Lobb in February 2022, and passed the House of Commons last March with the support of all parties except the Liberals.
The bill seeks to take the carbon price off natural gas and propane used by farmers for heating their buildings or running their grain dryers.
Farmers are already exempt from the price on pollution for gasoline and diesel to run their farm vehicles and machinery, but they have said the carbon price is costing them thousands of dollars for heating barns and drying their crops.
Dave Carey, co-chair of the Agriculture Carbon Alliance, told the Senate agriculture committee in September that there are “no viable alternatives” for heating and cooling livestock barns and greenhouses, or for grain drying.
He said the carbon price isn’t an incentive to change, but rather is a “significant financial burden on producers who don’t have other viable options.”
Tom Green, senior climate adviser at the David Suzuki Foundation, told the committee there are things farmers can do to lower their fossil-fuel use for both barns and grain dryers, pointing to poultry farms that have installed solar roofs or thick insulation that reduced their energy consumption.
He also noted that the government has grant programs to help them transition to lower-emitting options, and offsets farmers’ carbon costs with a tax credit.
That tax credit came into being after Bill C-234 was first introduced. It is not connected to the actual carbon price that is paid or the amount of fuel that is used, but is instead calculated based on a farm’s income.
Greenhouse operators can also get 80 per cent of the carbon price taken off when they buy fuel for their greenhouse operations.
“Bill C-234 sets Canada on a slippery slope of considering sector-by-sector, special-interest-by-special-interest exemptions,” Green said.
“Every sector can come up with their own reasons for why they deserve relief.”
A month after that meeting, the Liberals suddenly announced they would be exempting home heating oil from the carbon price for three years to allow people more time and money to replace oil furnaces with electric heat pumps.
Critics panned the move as a political manoeuvre to save Liberal votes in Atlantic Canada, where home heating oil is used by about one in three homes.
Simons was livid.
She had just voted in favour of a version of Bill C-234 that was amended in committee so that the exemption would only apply to grain drying — not to heat for farm buildings.
And now the government was unilaterally carving out the carbon price in another sector that heavily benefited the Atlantic region.
When the legislation was brought back to the full Senate, senators struck down the committee’s amended version of the bill, which would have left heating out.
Simons abstained in that vote.
“I couldn’t look Alberta farmers in the face and vote in favour of it, given what had happened in Atlantic Canada,” she said.
Forty-two senators voted against the amended bill, 28 voted in favour of it and three, including Simons, abstained.
The version of the bill that doesn’t contain the amendment is still on the table and is awaiting a final vote before it either dies or passes and becomes law.
Simons said there are solid arguments from many camps in the debate over what senators should do, though she dismissed the contention from premiers and Poilievre that the bill will lower grocery bills, because food prices are affected by a lot more than a carbon price on grain dryers.
“This is not going to dramatically drop the price of bread,” she said.
The costs for farmers could also change because the tax credit that is meant to offset farmers’ carbon costs may disappear if the bill passes. While some farmers have said the credit wasn’t enough to offset their carbon price bills, other say it is.
Guilbeault said the government will have to wait and see what happens before deciding how to proceed.
Simons said she thinks the bill may still pass.
But the Senate, which is mostly represented by independent members without direct ties to any political party, is less predictable than it used to be — so at the moment, it’s not clear what will happen.
The bill is expected to resume debate when the Senate reconvenes next week.
Minister of Environment and Climate Change Steven Guilbeault holds a press conference on Parliament Hill in Ottawa on Thursday, Oct. 26, 2023. THE CANADIAN PRESS/Sean Kilpatrick
Environment and Climate Change Minister Steven Guilbeault is calling out Pierre Poilievre’s push to pass a bill seeking to scrap the carbon tax on farm fuels, saying that if the Conservative leader had “any sense of moral decency,” he would “admit” the fuel price currently only applies to a small percentage of farm fuels.
“First and foremost, people should remember … we’ve already excluded 97 per cent of fuels used on farms,” the minister said. “Because at the time when we when we put in place carbon pricing in Canada … we realized that there was no alternatives for these applications.”
His remarks come amid brewing parliamentary discontent over Conservative MP Ben Lobb’s private member’s bill seeking to eliminate the carbon price on propane and natural gas for some farming equipment and on the heating and cooling of some farm buildings, namely barns and greenhouses.
The bill has been before Parliament since 2022, clearing the House in March 2023 with broad opposition party support. It still needs to clear third reading before becoming law, a step that’s been delayed until at least the Senate’s next sitting date on Nov. 21 when senators are set to resume debate on the bill before a final vote.
As it nears passage in the Senate, Bill C-234 is drumming up controversy amid heightened attention on the Liberals’ climate plans, given Prime Minister Justin Trudeau’s recent changes to the carbon pricing plan, including a pause on the pollution price of home heating oil.
On Monday, Poilievre speculated that Guilbeault could resign if Bill C-234 passes in the Senate and accused the environment minister of “frantically calling senators, begging them to block this bill.”
“So what’s going to happen? Well, the pressure is on, and today I announce that the common-sense Conservatives are launching a full-on campaign to push for Liberal senators to allow the passage of C-234 to take the carbon tax off farmers and food,” Poilievre said.
Guilbeault told reporters on Tuesday that he’s had discussions with “half a dozen” senators in the last couple weeks to express the federal government’s opposition to the legislation.
Facing ongoing pressure from the opposition to expand the current home heating oil carve-out to all forms of home heating used more commonly in other parts of the country, Trudeau has said there will be “absolutely” not be any other carve-outs to the carbon tax.
During a virtual press conference on Tuesday, Guilbeault reiterated that the Liberals are against any new exemptions to the carbon price.
But, Guilbeault said, his conversations with members of the upper chamber were “more of a conversation … than a lobbying effort” and he accused Poilievre of being the one attempting to influence senators.
“The senators we’ve nominated as a government since 2015 are independent senators,” he said. “The only person who tells senators what to do and how to vote is Pierre Poilievre. We don’t do that.”
Guilbeault said the current carbon price “only applies to three per cent of fuels” used in farming, if and when “alternative technologies are available.”
He said the federal government will make its decision on how to respond to the bill, if and when it passes.
OTTAWA – Almost half of the Canada Growth Fund for clean technology investments will be allocated to special contracts intended to give companies the confidence they need to make major investments to lower their greenhouse-gas emissions.
Finance Minister Chrystia Freeland used her fall economic update Tuesday to confirm that the fund — which she launched a year ago in the 2022 fall economic statement — would be the principal vehicle to deliver carbon contracts for difference.
She said up to $7 billion of the $15-billion fund will be set aside for contracts for difference, some of which are already being negotiated.
The contracts acknowledge that companies are making decisions to invest in things that lower their carbon emissions based on how much they expect to pay for the carbon price over several years. Those investments are only sound if they would cost less than what the company would pay in carbon pricing without the technology.
If the carbon pricing system changes in the future, the investments companies make to avoid paying it could become far less lucrative. Contracts for difference are an insurance policy of sorts against the carbon price going down or being eliminated, making the clean-tech investments less risky.
Freeland has been floating the idea of carbon contracts for difference for more than a year, as major energy companies, in particular, look for additional support to stay competitive in the face of the massive subsidies on offer under the U.S. Inflation Reduction Act.
She said on Tuesday that she wants Canadians to know no other country is competing harder with the United States for clean-tech transition investments.
“We are in a race, and we are committed to owning the podium. And that is what we saw in the budget in the spring, and that is what we see in this economic update,” she said in a news conference just before tabling the fall update in the House of Commons.
“This is a plan to attract investment. It is a plan for the economic transformation, for the industrial transformation. Most of all, it is a plan for good jobs for Canadians today and tomorrow.”
The contracts could be the final piece of the puzzle that major oilsands companies need in place to start building massive carbon capture and storage projects, which are critical if Canada wants to have any chance of meeting its next emissions targets.
The Pathways Alliance, an alignment of Canada’s biggest oilsands companies, is working toward such projects, but it has been looking for more support than was offered as part of a new tax credit for the technology.
The Liberals’ carbon pricing policy has been on politically shaky ground for years, amid heavy Conservative criticism.
In recent weeks, Conservative Leader Pierre Poilievre moved to frame the next election around it, even though that election could still be almost two years away.
The Liberals’ recent move to pause the carbon price for three years on home heating oil was seen by some pundits as a sign that even they were backing away from one of their signature policies, introducing further uncertainty to the system.
The fall update also promised some movement on previously announced tax credits for the clean-tech transition, with legislation to create tax credits for carbon capture and storage and clean technology expected in the next few weeks.
The document also says a long-awaited Indigenous loan guarantee program will be established to allow Indigenous communities to access the capital they need to be involved in major energy projects.
However, the statement does not make clear if the guarantees would be offered for oil and gas projects as well as new clean energy projects.
Industry and communities alike have asked for that inclusion.
An Indigenous loan guarantee would protect lenders from potential defaults by including language that a third party — in this case, the federal government — would pay the bill should the borrower default.
Indigenous loan guarantees are already available in Alberta, Saskatchewan and Ontario, but the lack of a federal program has led to criticism from industry and First Nations leaders that jurisdictional gaps prohibit economic development.
The premiers of five provinces are calling for Prime Minister Justin Trudeau to meet with them to discuss their request for carbon price exemptions on not just home heating oil, but all forms of home heating.
The open letter shared Saturday
was signed by the premiers of Nova Scotia, New Brunswick, Ontario, Alberta and Saskatchewan.
In the open letter, the premiers wrote that while they are pleased that Atlantic Canada has received a carbon price exemption on home heating oil, which around 30 per cent of residents use, they believe that similar exemptions need to follow.
“Many Canadians households do not use home heating oil and instead use all forms of heating to heat their homes. Winter is coming and these people also deserve a break,” the letter states. “It is of vital importance that federal policies and programs are made available to all Canadians in a fair and equitable way.”
The premiers added that they feel this decision has “caused divisions across the country” by “singling out Atlantic Canadians” for this relief.
The letter called for the federal government to remove the federal carbon price from “all forms of home heating,” and concluded with a request to meet and discuss the issue.
This comes after two weeks of debate following the announcement of a temporary pause of the carbon price for those who use home heating oil, which is most commonly used in Atlantic Canada.
Trudeau has rejected the idea of expanding the pause to other forms of heating, stating at the end of October that “there will be no more carve-outs coming.”
In a meeting of Canada’s premiers earlier this week, they made a similar statement that they felt the change was not equitable.
Both the federal Conservative party and the federal NDP have also expressed opposition to singling out home heating oil for an exemption.
The carbon price is a climate policy measure which aims to lower greenhouse gas emissions by making it more expensive to burn fossil fuels.
Although it has been contentious since it was first proposed, tension around the policy has increased in recent months as high inflation and a growing cost-of-living crisis continue to put pressure on Canadians.
Canadians receive rebates on their tax return to compensate them for the carbon price, referred to as a “climate action incentive,” with the amounts varying depending on where you live. According to Canada’s parliamentary budget officer, 80 per cent of households will receive more from the rebate than they pay in carbon pricing.