Carney Defends Carbon Strategy, Says Trade With Europe, Asia Dependent on It

Prime Minister Mark Carney speaks during a bilateral meeting with Britain's Prime Minister Keir Starmer inside 10 Downing Street, in central London, on March 17, 2025. Jordan Pettitt/POOL/AFP via Getty Images

Prime Minister Mark Carney said his government’s carbon pricing policies will be important for Canada’s efforts to diversify trade with other countries. Carney has said Canada needs to reduce its dependency on the United States.

“It’s a more efficient system. It works better for the large polluters, it works better for Canadians, and it also is a system that recognizes the new trading reality,” Carney said at a press conference in the London, England, on March 17.

Carney said with the United States placing steep tariffs on the nation, Canada is being given the “opportunity” to diversify its trade with other countries. “Guess what one of the requirements is to diversify trade to the European Union?” he said, adding that a form of carbon pricing is also necessary for trade with the U.K., and will become a necessity for trading with “emerging Asia.”

“So we are able to think one step ahead. We’re able to go out and see the world. We’re able to help Canadian companies prepare,” he said. Carney added that when the United States has its next presidential election, the country will “start caring” about carbon pricing again.

“Europe has an enormous opportunity to leapfrog over American companies where they’re trying to turn back the clock and look inwards. We’re going to take that opportunity,” he said.

Carney made the comments following a visit to France to meet President Emmanuel Macron, and to the U.K. to meet King Charles and Prime Minister Keir Starmer.

Carney signed a directive on March 14, shortly after becoming prime minister, to bring the consumer carbon tax rate to zero.

During the Liberal leadership campaign, Carney said the government’s carbon tax had become “too divisive.” The carbon tax came into effect in 2019 at $20 per tonne, and was set to slowly increase until reaching $170 per tonne in 2030, to incentivize Canadians and businesses to transition to greener forms of energy.

Carney proposed replacing this system, which was meant to lower carbon emissions, with one that rewards Canadians for making lower-emission choices.

Carney has said he would develop a new “consumer carbon credit market” and make “big polluters pay” for this system.

During the campaign, he said his government would also develop a Carbon Border Adjustment Mechanism to “ensure fairness for Canadian industries, prevent carbon leakage, and better economically integrate Canada with allies in the fight against climate change.”

Removing the carbon tax altogether, according to Carney, would make Canadians “worse off” by ending the Canada Carbon Rebates, while also slowing the decline of the country’s carbon emissions.

Earlier in the day on March 17, Conservative Leader Pierre Poilievre said his government would completely remove the carbon tax for both consumers and industrial emitters. He said this would include axing the federal backstop that required provinces to impose industrial taxes, giving them the choice of whether they want to implement them.

Poilievre also proposed giving tax credits to industries that lower emissions, using “technology, not taxes” to do so.

The Conservatives have been highly critical of the Liberal government’s carbon tax, repeatedly arguing the policy makes food, fuel, and home heating more expensive for Canadians. They also say passing on higher costs to large businesses will impact consumers, as businesses will be forced to pass on the costs.

The Conservatives have also accused Carney of proposing a rebranded “shadow carbon tax” that would be brought back after the next federal election “bigger than ever.”

The Liberal Party said in a March 17 post on X that Carney cancelled the consumer carbon tax because his government is focused on “real solutions,” while Poilievre has “no plan for the environment or the economy – just slogans.”

The Trump administration has removed the United States from the Paris Agreement, which requires commitments to cut emissions.

The largest emitter of greenhouse gases in 2023 was China, accounting for 30.1 percent of the world emissions, followed by the United States at 11.3 percent, India at 7.8 percent, and the European Union nations collectively at 6.1 percent. Canada accounted for 1.4 percent of the emissions.