Canada’s carbon tax has long been celebrated globally as a model of progressive environmental policy, achieving emission reductions and putting money back into Canadians’ pockets. Supported by both conservative and progressive economists, the policy has withstood multiple federal elections and a supreme court challenge. However, a persistent cost-of-living crisis and a combative Conservative leader with a populist message have thrown the carbon tax back into the spotlight, questioning its fate in the next national election.
Mass hunger and widespread malnutrition. A potential nuclear winter. A dire threat to the Canadian way of life. For months, Conservative leader Pierre Poilievre has been warning of an increasingly catastrophic future. His target? The federal carbon tax aimed at curbing greenhouse gas emissions.
In a recent address to the House of Commons, Poilievre declared that there’s only one way to avert this looming crisis: Prime Minister Justin Trudeau must call for a “carbon tax election”.
In 2018, Trudeau introduced the “pan-Canadian climate framework,” inspired by British Columbia’s pioneering carbon tax model. The levy is revenue-neutral, meaning the government doesn’t retain any funds; instead, it returns the money to taxpayers through quarterly rebates. Any increased costs from fuel taxes are balanced by rebates of similar value.
According to government data, an Ontario family of four will receive C$1,120 (£630) this year in rebates, while rural communities receive even more. In Alberta, a rural family of four can expect C$2,160. Households willing to adjust their behavior can potentially benefit more, as low-income families typically receive more in rebates than they pay in additional costs. Yet, the Conservatives, currently leading in the polls, aim to capitalize on public frustration with rising costs, reframing the federal vote as a referendum on Trudeau’s hallmark climate policy. Their campaign slogan, “axe the tax,” is plastered across billboards and T-shirts, positioning the levy as an undue burden on Canadians struggling with increased expenses.
Kathryn Harrison, a political scientist at the University of British Columbia who has extensively studied the impact of carbon levies, expressed concern over the misinformation being spread for political gain.
“The current political discourse has led many Canadians to misunderstand how the policy affects them. They don’t believe it works and think they’re paying more than they actually are. It’s troubling, not just from a climate policy perspective but also for democracy,” she said. “This isn’t a debate over policy emphasis; it’s largely driven by misinformation.”
For Canada’s Environment Minister, Steven Guilbeault, the heated debate represents a pivotal moment for the country’s approach to tackling climate change.
“It’s easy to say, ‘axe the tax’—nobody likes taxes. But it’s much harder to communicate that climate change is real, costing Canadians billions, and that carbon pricing is just one tool we’re using to fight it. That’s more complex to explain than a simple slogan,” said Guilbeault.
The fierce rhetoric and misinformation point to deeper issues, he added. “Climate and environmental issues have become enmeshed in a culture war where facts don’t matter, and truth holds no value. This challenges the fundamental elements of our democracy, which is being eroded by disinformation.”
Despite the Conservatives’ strong opposition, other party leaders, such as the New Democratic Party’s Jagmeet Singh, have shown signs of wavering support. Singh recently stated he does not want a policy that places the “burden on the backs of working people,” a statement dismissed by experts.
“It’s surprising to see the federal NDP turning away from a progressive policy that not only cuts carbon emissions but also delivers rebates that outweigh payments for low-income families,” noted Harrison.
Guilbeault acknowledges that the federal government was “a bit slow” in countering misinformation.
“We could have communicated better, but the 2019 and 2021 elections were partly fought on carbon pricing—and we won. Initially, rebates were issued as a tax cut, which many didn’t notice. It took changes in the law for banks to finally label payments as ‘Canada Carbon Rebate.’”
As countries worldwide introduce measures to address the climate crisis, the Canadian Climate Institute projects that the national carbon levy, which targets both consumers and industries, could reduce emissions by up to 50% by 2030.
If a Conservative government were to eliminate the levy, Canada would have “no way” of meeting its 2030 emission targets, said Guilbeault, adding that this would weaken Canada’s position in negotiating with other nations on climate action.
Most of the current debate revolves around the consumer-facing fuel charge, rather than the industrial carbon tax, which the Canadian Climate Institute estimates will deliver three times the emission reductions of the consumer component by 2030.
Opposition leaders have vaguely suggested strengthening the industrial tax to compensate for the loss of the consumer levy. But Beugin, vice-president of the Canadian Climate Institute, warned that removing one policy will necessitate tightening other controls, and there are few untapped sources of emissions left.
“Climate policy is never easy. It takes effort to counteract politically simple solutions. While technology is becoming cheaper, we can’t shy away from the hard work needed for this transformation,” said Beugin.
