This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Jack Mintz, February 7, 2025
It was curious that in the heat of Friday’s furor over the Trump tariffs, Liberal leadership contender Mark Carney issued his plan for change on the consumer carbon tax. Typically, a Friday release, especially on a busy news weekend, is designed to avoid notice.
I doubt that was Carney’s intention. His document is an important policy announcement that has significant appeal to leftish Liberal party environmentalists. For the broader public, the headline that Carney promises to “axe the consumer carbon tax” was important to get out.
But Carney isn’t axing the consumer carbon tax. He is replacing one tax with another. The fuel charge — erroneously labelled the consumer tax even though low-emitting businesses pay it, too — will be replaced by a more complex scheme. Big emitters will pay consumers to lower their carbon footprint in a new consumer carbon credit market. It is an administrative nightmare compared to the existing fuel charge, even with the current system’s rebates to consumers and small businesses.
As Carney points out, the carbon credit market is already over-supplied. In Alberta, for example, the carbon credit price was $47/tonne in November, much less than the official $80/tonne carbon price. Adding a consumer credit market will increase supply to an already saturated market. To deal with this problem, Carney promises much stricter emission standards than are currently in place. With more emissions subject to tax, carbon credits get soaked up, eventually raising fuel prices. Though it is not officially a tax, the scheme will have the same effect on consumers and businesses as the fuel charge, a.k.a., “the carbon tax.”
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Jack Mintz is the President’s Fellow at the University of Calgary’s school of public policy and a distinguished fellow at the Macdonald-Laurier Institute.