Environment Minister Stephen Guilbeault says the federal government has no plans to do away with the carbon tax in the face of tariff threats from the incoming U.S. administration.
Guilbeault made the comments during a meeting of the Standing Committee on Environment and Sustainable Development on Nov. 28, in response to questioning from Conservative MP Dan Mazier on the matter.
“The United States is threatening Canada with 25 percent tariffs that would cripple the Canadian economy,” said Mazier. “Will you cancel the carbon tax so our economy can be competitive?”
“Carbon pricing is responsible for $25 billion in investment nationwide annually,” Guilbeault responded. “If we scrap that, that means scrapping $25 billion of investments, and we’re just not going to do it.”
Mazier responded by citing an internal report from Guilbeault’s department that estimated the carbon tax could cause Canada’s GDP to take a $25 billion loss by 2030, compared to what the figure would be if the tax was dropped. Conservatives have repeatedly called for the Liberals to “axe” the carbon tax, arguing it increases the cost of gas, groceries, and heating while failing to achieve its objective of fighting climate change.
The carbon tax is set to increase from $80 per tonne to $95 in April 2025, increasing by $15 each year until the end of the decade. Mazier asked Guilbeault if his government had made a decision on whether it would support increasing the tax to over $170 past 2030.
“There’s no decision that’s been made for what’s going to occur after 2030 when it comes to carbon pricing,” Guilbeault responded.
U.S. President-elect Donald Trump warned on Nov. 25 that he would impose a 25 percent tariff on all goods coming from Canada and Mexico until each country properly tackles its illegal immigration and drug smuggling issues. Canadian politicians and business groups have since been scrambling to formulate a response that would avoid the tariffs being levied, as the United States is Canada’s largest trading partner.
Trump did not prioritize fighting climate change when he was president from 2016 to 2020, as he pulled America out of the Paris Agreement, a decision that was reversed under U.S. President Joe Biden. Trump also introduced policies to encourage the use of fossil fuels during his last presidency.
Trump has pledged that when he retakes office on Jan. 20, 2025, he will increase drilling for fossil fuels and repeal major climate policies passed during Biden’s presidency such as the Inflation Reduction Act which promotes clean energy and electric vehicles.
