Carney Does What Poilievre Has Demanded – Says He’ll Scrap the Carbon Tax, Introduce Green Incentive Program if he Becomes Leader

Canada’s national carbon tax on consumer fuels is likely in its final weeks after both major contenders to replace Prime Minister Justin Trudeau as Liberal leader have promised to scrap it.

“My government will immediately remove the consumer carbon tax,” said Mark Carney, the former central bank governor who’s now vying for Trudeau’s job. “Since Canada’s current climate policy has become too divisive, it’s time for a new, more effective climate plan that everyone can get behind.”

Carney he will focus on other measures such as tightening the carbon tax on industry and creating consumer incentives for energy-efficient appliances, vehicles and building materials.

Chrystia Freeland, the former finance minister who is Carney’s main rival in the leadership race, has also said the carbon tax needs to be replaced due to its deep unpopularity. “We have to listen to that and change it,” she said during her campaign launch rally on Jan. 19.

The tax, which imposes a minimum price on consumer fuels across the country, is one of Trudeau’s signature environmental policies but it has become deeply unpopular. That’s in part due to relentless attacks on it by Conservative Leader Pierre Poilievre, who argues it drives up prices for Canadians with too little effect on climate change.

Trudeau has defended it as the most efficient tool for driving emissions reductions, and pointed to the fact the revenue is distributed back to Canadians through quarterly rebates.

But with Poilievre repeatedly calling for a “carbon tax election” and aiming to make it the central ballot question, those vying to replace Trudeau are distancing themselves from the policy.

The leadership race will conclude March 9, meaning the carbon tax could be canceled soon afterward. However, it is also possible the new prime minister will be plunged into an immediate election, which could delay any changes to the tax.

While the consumer fuels tax appears dead, the carbon tax on industrial emissions looks likely to stay. Freeland’s campaign has also said she would “make big polluters pay for their outsized emissions.”

Poilievre has been unclear on what he would do with industrial emissions, but indicated he supports the province of Alberta’s model of industrial emissions pricing.

Carney also said he wants to focus on measures to boost Canadian companies to compete globally, particularly as the US reverses course on climate measures under President Donald Trump. He pledged to speed up approvals of clean energy projects and boost investment tax credits for green technology.

“Canada can become a clean energy superpower and make the most of our existing oil and gas resources during the transition,” Carney said. “We now have an opportunity to leapfrog the United States while they turn inwards and attempt to turn back the clock.”