Canada’s only remaining Liberal provincial premier called on Prime Minister Justin Trudeau to stop his planned carbon price hike next month, saying its increase would compound the affordability crisis that his constituents and all Canadians are facing.
In a letter sent to Mr. Trudeau on Tuesday, Newfoundland and Labrador Premier Andrew Furey asked the Prime Minister to rethink his policy, in the context of what he called the “most significant cost of living crisis in a generation.”
The federal carbon price is set to go up by $15 on April 1, from $65 to $80 per tonne. The federal charge is applied in all provinces except British Columbia and Quebec, which have their own provincial carbon pricing systems.
Mr. Furey said the increase “is causing understandable worry as people consider how they will manage the mounting financial strain.”
The Premier said increases to the carbon price should be paused until inflation subsides and interest rates are lowered.
Mr. Furey said the Prime Minister should collaborate with Newfoundland and Labrador to “address the ramifications of the current challenges families face and not compound them.”
The public demand from a premier who is typically friendly with the federal Liberals was made just days after Conservative Leader Pierre Poilievre promised a widespread pressure campaign against the carbon price increase in the weeks leading up to the April 1 change.
Mr. Poilievre called the increase an April Fool’s tax hike at a Sunday rally in Toronto’s east end that drew thousands. “With Justin Trudeau and the NDP, the joke is on you,” he told the crowd.
He paired his long-standing “axe the tax” rallying cry with a fresh demand that the Prime Minister “spike the hike” and urged Canadians to join the opposition by organizing protests outside Liberal MPs’ offices and launching letter-writing campaigns.
“If you think that you’re too small to be effective, you’ve never been in a tent with a mosquito,” Mr. Poilievre told the crowd.
The Conservative Leader landed in St. John’s Tuesday for the start of an East Coast tour.
The carbon price is so unpopular in Atlantic Canada that Liberal MPs campaigned last year for changes. In response, the government in part exempted home heating oil from the carbon price for more than three years. That type of fuel is more commonly used on the East Coast. At the time the government cited affordability concerns as one of the reasons for the change.
However, the decision was widely criticized because it disproportionately favoured households in a Liberal stronghold and didn’t give the same treatment to people who use other fuels to heat their home. Saskatchewan has since refused to collect the carbon price on natural gas.
The price on carbon is one of Mr. Trudeau’s key climate policies and was something the Liberals campaigned on in the 2015 election that brought them to power. But since they’ve won two subsequent elections on the policy, the pollution price has come under intense scrutiny amid rising inflation and interest rates and the resulting affordability crisis.
In provinces subject to the federal carbon price, residents get costs returned to them in quarterly rebates. Once the rebate is factored in, the Liberals say the majority of households get more back than they pay.
However, the Parliamentary Budget Officer has questioned that assessment, saying that once direct and indirect costs of the carbon price are accounted for, most households will see a net loss.
In addition, the budget watchdog has noted that the federal government charges sales tax on top of the carbon price. In the next fiscal year, the office estimates that the sales tax charged on the carbon price will generate $600-million in revenue.
Mr. Furey’s demand to stop next month’s carbon price hike was echoed on social media by a slew of conservative premiers including Nova Scotia’s Tim Houston, New Brunswick’s Blaine Higgs, Alberta’s Danielle Smith, Saskatchewan’s Scott Moe and Ontario Premier Doug Ford.
“People across Canada are hurting right now from the high cost of living. The federal government needs to put a stop to the carbon tax,” Mr. Ford said.
Mr. Trudeau’s office declined to comment on Mr. Furey’s demand and instead directed the request to Finance Minister Chrystia Freeland’s office. Her spokesperson, Jesse Bartsoff, defended the policy.
“Carbon pricing will contribute as much as one-third to Canada’s emissions reductions by 2030,” Mr. Bartsoff said in a statement. “This is the most cost-effective way to protect our communities.”
During a news conference Tuesday in Coquitlam, B.C., NDP Leader Jagmeet Singh, whose party props up the minority Liberals in the House of Commons, said the carbon price should be offset by removing the federal sales tax from home heating.
With a report from The Canadian Press
Marieke Walsh
Ian Bailey