Environment minister open to replacing carbon tax if Canada can still meet its climate goals

Environment Minister Steven Guilbeault said he is open to replacing the carbon tax he has long defended if Liberal leadership candidates propose new measures to help Canada achieve its climate targets.

Guilbeault, a staunch advocate of consumer carbon pricing, did not call for an end to the controversial measure. However, he told reporters on Monday that he has been discussing alternatives with candidates in his party's leadership race if they decide to abandon it.

"Our plan to fight climate change is much broader than just one measure," Guilbeault said.

"There are about 100 different measures we have deployed to fight climate change in Canada. The consumer carbon pricing element is an important element. But it is not the only one."

Guilbeault noted that industrial carbon pricing in Canada achieves three times the emissions reductions of consumer carbon pricing.

"I am talking to all of the candidates to say, OK, if we are not moving ahead with this particular element, what it is you will put in place to ensure that Canada can continue to fight climate change and to make sure we can reach our 2030 targets?" Guilbeault said.

The following day, Guilbeault reflected a bit more on his comments. 

"My statement to many of you yesterday was a difficult one," Guilbeault said on Tuesday. "I continue to believe that the consumer price on pollution is one of the best tools we have to fight climate change."

Several candidates in the Liberal leadership race are distancing themselves from the carbon tax. Chrystia Freeland confirmed on Sunday that she'll ditch the policy. Ontario MP Karina Gould committed to pausing a scheduled increase in April, but would not repeal the policy that has been a target of the Conservatives.

Although Mark Carney did not specifically say what he would do, the former Bank of Canada governor said he would present a plan. Launching his campaign last week, Carney said he'd want a carbon tax replacement "that is at least, if not more, effective." 

Guilbeault announced Tuesday that he is endorsing Carney in the leadership race.

Ending carbon rebate could hurt some: Guilbeault

Removing the consumer carbon tax is not without risks.

While it is a climate policy, it is also an income source for low- and middle-income Canadians. 

In addition to paying the carbon levy on fuel and home heating, many consumers in the Prairies, Ontario and Atlantic Canada receive a quarterly federal rebate that's been branded the Canada Carbon Rebate. 

"The beauty of the consumer carbon pricing is that it was both an environmental measure and as well as a social measure," Guilbeault said Tuesday. "Despite the lies that Pierre Poilievre has been telling Canadians, more Canadians get more money back from carbon pricing than what they pay."

Since becoming Conservative leader, Poilievre has campaigned on axing the carbon tax and has called for the next election to be fought on the issue.

Guilbeault said he will work with Carney to ensure the country will still have a climate policy that helps "Canadians with affordability but will help us achieve our 2030 targets."

Can Canada achieve its climate goals without a carbon tax?

Analysis from the federal government and independent research shows the consumer carbon price is a small player relative to the other climate policies.

Industrial carbon pricing, the oil and gas emissions cap and methane regulations play a more significant influence on achieving Canada's climate targets, according to the policy research organization, the Canadian Climate Institute.

"There's actually a complete mismatch between the amount of oxygen that the debate surrounding the consumer carbon price sucks out of the room and its actual importance when it comes to making a dent with the greenhouse gas emissions," said the institute's president Rick Smith.

Its analysis shows the carbon tax accounts for between eight and nine per cent of the emissions reductions in 2030.

Large emitter trading systems or industrial carbon pricing account for much more reductions — between 23 and 39 per cent of the avoided emissions.

Getting rid of the carbon tax would leave a gap in Canada's emission reduction plan.

Still, Smith said there are other ways to close that gap, like strengthening existing federal climate policies or provinces doing more.

"It's important that we not let other governments off the hook. [There are] things that need to happen at other levels of government across the country," Smith said.

Guilbeault didn't speak about the role other jurisdictions need to play. But he pointed to  federal climate policies like industrial carbon pricing and the yet to be implemented cap on oil and gas emissions.

"One obvious answer if we don't move ahead with consumer carbon pricing would be to tighten the system that we already have for large polluters in the country," Guilbeault said.

"There are other things that we are working on deploying. A cap on pollution from the oil and gas sector will be a key component of our tools to ensure that every sector of the Canadian economy … does its fair share when it comes time to reducing pollution."