Trudeau blinks, suspends carbon tax on home heating in Atlantic Canada

Posted on November 16, 2023 by Ryan Dahlman

Prime Minister Justin Trudeau just gave Western Canada another punch in the face.

The good news is that Trudeau is suspending his carbon tax on home heating fuel.

The bad news is the exemption is for just one kind of home heating fuel.

Guess which kind?

Furnace oil, the kind of heating fuel found almost exclusively in the homes of Atlantic Canada, where Trudeau’s Liberal government holds a lot of seats.

Trudeau is suspending his federal carbon tax on furnace oil until just after the next election, expected in two years.

The federal carbon tax currently costs 12 cents extra per cubic metre of natural gas, 10 cents extra per litre of propane and 17 cents extra per litre of furnace oil.

The average household in Atlantic Canada uses about 1,600 litres of furnace oil per year. That means the carbon tax would cost about $272 extra for winter heat.

That winter warmth will now get a reprieve from Trudeau’s carbon tax. However, the tax will still apply to propane and natural gas that many families in the rest of Canada use to stay warm.

What about the West? What early Christmas present did we get from Ottawa to ease the pain of winter heating bills?

The naive Westerner might be surprised to hear that it’s, as usual, nothing because most homes in Western Canada rely on natural gas for heat, not furnace oil.

An average Alberta home uses about 2,800 cubic metres of natural gas per year, so the carbon tax will cost Albertans about $337 extra to heat their home. Saskatchewan homes use about 2,244 cubic metres of natural gas, costing $269 extra in the carbon tax per year, and homes in Manitoba go through about 1,989 cubic metres of natural gas, costing $238 more for the winter.

Despite that regional unfairness, Thursday afternoon’s announcement displayed an important revelation.

Trudeau blinked.

He has finally been forced to admit the carbon tax is unaffordable. He has had to concede that it is unwise and unfair to punish people with a carbon tax for the essential action of heating their homes to survive a Canadian winter.

The carbon tax carve out for only furnace oil is so obviously preferential that Trudeau is bound to get pressure from other corners of his caucus.

Average Ontario homes go through about 2,300 cubic meters of natural gas per year, costing them more than $280 extra per year in Trudeau’s carbon tax. Liberal MPs from across the province – all 76 of them – will be having some interesting conversations with their constituents.

Why aren’t they getting the same deal? It’s not surprising, given that Trudeau hasn’t helped carve out needed carbon tax exemptions before.

Bill C-234 is a bill that seeks to remove the carbon tax from propane and natural gas for use on farms because farmers, especially in rural areas, often have no other choice of fuel. It received unanimous support in the House of Commons from all parties except the Liberals. Three Liberal MPs voted in favour of the bill, all from Atlantic Canada.

Trudeau said his exemption for furnace oil is meant to give rural Canadians more time to switch to alternative sources. But not if they happen to be farmers.

Making sure exemptions for farmers get passed in the Senate and swiftly become law would show that this isn’t just about politics for Trudeau.

And then the next step is scrapping the carbon tax for everyone, everywhere in Canada.

It’s the only fair way to stop punishing people for driving to work, growing and buying food, and heating their homes in the winter.

Kris Sims is the Alberta Director, and Gage Haubrich is the Prairie Director, for the Canadian Taxpayers Federation.

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