After forcing the Liberals to scrap the
earlier this year, Conservative Leader Pierre Poilievre pledged to get rid of “carbon tax 2.0.”
“We are making it a priority to boost take-home pay and reverse the Liberal cost of living crisis by opposing (Prime Minister) Mark Carney’s carbon tax 2.0,” Poilievre announced during his trip to the East Coast this week.
But what is “carbon tax 2.0” and how does it impact Canadians? Here’s what we know.
What is ‘carbon tax 2.0’?
Poilievre is labelling the Clean Fuel Regulation (CFR) as “carbon tax 2.0” or “the second carbon tax.” The regulations came into effect in 2023 and, according to the Conservative leader, are adding several cents to the price of gas across Canada.
The CFR focuses on oil producers and refiners, and aims to reduce greenhouse emissions in Canada. According to the
, the regulation is “designed to incentivize innovation and adoption of clean technologies and expand the use of low carbon intensity fuels throughout the economy.”
Are Canadians paying this new ‘tax’?
Not in the same way as under the old system, which set a price on emissions. The CFR requires energy producers to move toward cleaner methods. Any costs are theirs to bear, and they can choose to pass them along to consumers if they want.
It is not known how much the CFR is currently contributing to the cost of gas. When the carbon tax was cancelled earlier this year, it was adding 17 cents per litre of gasoline and was set to increase every year until it reached 37 cents per litre in 2030.
Is the CFR the old carbon tax under a new name?
Referencing a report by the Parliamentary Budget Officer, Poilievre said CFR will increase the price of gas by up to 17 cents by 2030. “What did the last carbon tax add to your gas? Seventeen cents per litre. The new tax is starting to look a lot like the old tax, and Mark Carney thinks no one will notice,”
.
, a professor of political science at the University of Toronto, says it’s more complicated than that.
“It is (the same) in the sense that it regulates suppliers,” she told National Post. “And then the suppliers have to decide what they want to do to cover the cost of compliance, and they can pass those costs on to the consumer.”
Where it varies, she said, is that it’s more flexible in the ways it allows energy producers to meet their goals.
“They can do things like buy credits to reach their reduction goals, or generate credits to sell their over-compliance. And a tax is just a tax; it’s just X number of cents per litre, but this is a more sophisticated or complicated system, which gives suppliers more flexibility on how they’re going to meet their requirements.”
The CFR was also implemented before the carbon tax was scrapped. It is not known how much it is currently contributing to the cost of gas as the PBO report cited by Poilievre was published in May 2023, before the CFR came into effect on July 1 of that year.
Environment and Climate Change Canada (ECCC) “estimates that the CFR will increase the price of gasoline and diesel in 2030 — the year in which the CFR reach full stringency — by up to 17 cents per litre and 16 cents per litre, respectively,” the report states. “Further, ECCC estimates that the CFR will decrease real GDP in Canada by up to 0.3 per cent (or up to $9.0 billion) in 2030.”
How will scrapping ‘the carbon tax 2.0′ boost Canadians’ income?
Poilievre contends that the CFR is draining the pockets of Canadians and blames the tax for the increased cost-of-living and affordability problems in the country.
He said it could add up to $136 more to costs per household every year, so getting rid of it could mean more money saved.
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