The temporary pause will begin in 14 days, applying to all jurisdictions where the federal fuel charge is in effect.
Prime Minister Justin Trudeau has announced a three-year pause on the heating oil carbon tax to give Canadians time to switch to electric heat pumps.
“This is an important moment where we’re adjusting policies so that they have the right outcome,” Mr. Trudeau said during a press conference on Oct. 26.
The temporary pause on the fuel charge on heating oil for homes and small businesses
will begin in 14 days, applying to all jurisdictions where the federal fuel charge is in effect. The Liberals estimate that the pause will save an average household that uses heating oil $250.
Mr. Trudeau said that beginning in April 2024, the Climate Action Incentive Payment rural top-up rate will also be doubled from 10 percent to 20 percent of the baseline amount that Canadians get as part of their quarterly carbon price rebates.
“If you live in a rural community, you don’t have the same options that people who live in cities do. We get that. So, this is more money in your pocket to recognize those realities, even as we continue to fight climate change,” he said.
The federal carbon tax, which applies to provinces and territories without their own carbon pricing systems, is currently priced at $65 per tonne of emissions and will increase by $15 every year until 2030. Households in the provinces receive carbon rebates to offset the costs they incur.
The federal carbon tax has proven to be a
controversial policy, with a September Ledger poll finding that 55 percent of Canadians say the tax should either be reduced or completely eliminated. The tax has been particularly unpopular in Canada’s Atlantic provinces, where
30 percent of homeowners still use furnace oil to heat their homes.
Liberal MP for Newfoundland and Labrador Ken McDonald
has voted twice in favour of Conservative motions calling on the government to repeal the tax. Back in 2022, Newfoundland and Labrador Premier Andrew Furey also wrote a letter to Ottawa urging for it to implement an exemption for home heating oil.
Mr. Trudeau acknowledged the plight of Atlantic Canadians when making the announcement on Oct. 26 surrounded by Liberal MPs from the region. “We’ve heard clearly from Atlantic Canadians through our amazing Atlantic MPs that since the federal pollution price came into force ... certain features of that pollution price needed adjusting to work for everyone,” he said.
Conservative Leader Pierre Poilievre, who is holding an “Axe The Tax” rally in Windsor, N.S.,
responded to the news on X by claiming the prime minister was “flipping and flopping” on the carbon tax in response to poll numbers. “He’s admitting he’s not worth the cost.”
