Western Premiers Call for Equal Taxation

Premiers in Western provinces are arguing the exemption of the federal carbon tax for homes using heating oil is unfair as most of their residents use natural gas to heat their homes, for which they pay carbon tax.  

Premier of Alberta Danielle Smith and Saskatchewan Premier Scott Moe have each asked the Trudeau government to halt the carbon tax from natural gas home heating as it is the manner in which most homes in each province are heated. The premiers mentioned have stated their opposition to the oil exemption leaves those living in other regions to foot the carbon tax bill. 

Moe has instructed provincially owned SaskEnergy to stop collecting carbon taxes on power until there is national equality pertaining to the implementation of such a tax.  

“The Canadian government needs to extend fairness to all Canadian families,” he said. 

The federal carbon tax was introduced by the Liberal government in 2019 as a means to incentivize homeowners and businesses across the country to cut carbon emissions by reducing their use of fossil fuels and moving to greener energy. The federal government has introduced programs to subsidize the cost of purchase and installation of heat pumps to heat houses using electricity. 

Atlantic Canada was given a reprieve from the carbon tax in late October to help people in the region manage high heating costs. Trudeau announced a three-year exemption from the federal carbon tax on homes which use heating oil.  

“There’s a lot of home heating oil used in Nova Scotia, so the changes will help them heat their homes this winter and make life a little more affordable,” Nova Scotia Premier Tim Houston said. 

In Atlantic Canada, one-third of residents use heating oil, a much higher rate than anywhere else in Canada. Houston has been critical of Trudeau’s regionally targeted approach with this exemption. Houston says the lack of national collaboration and equality in each situation “Risks putting provinces and territories against each other” as the carbon tax remains on homes using gas heating across the country. 

After the carbon tax carve-out announcement, Manitoba Minister of Finance Adrien Sala said the Manitoba NDP is interested in a carbon tax exemption for heating homes using other natural resource methods. Manitoba Premier Wab Kinew added Canada’s climate goals should not be attained through the wallets of working-class Canadians via the carbon tax.  

“The carbon tax is not a silver bullet when it comes to climate change,” Kinew told reporters at the meeting of the Premiers in Halifax last week.  

Kinew believes carbon tax exemptions on the cost of heating one’s home should be for Manitobans and the rest of Canada. 

“During this inflationary period, people are suffering. In light of that, we do think there should be similar considerations given to the people of Manitoba to get us through this period of economic pain,” Kinew said. 

Kinew said he hopes the federal government bears in mind that they must ensure the carbon tax is equitable at a time when the cost of living has sky-rocketed, and Canadians are struggling to make ends meet. He believes there is a middle ground between climate-forward policies and helping working-class Canadians during rapid inflation. He also called for evidence-based policies to reduce carbon emissions and lead consumers to use less energy. 

Before Kinew came forward with this newfound opposition to the carbon tax, Danielle Smith and Scott Moe had already gone to Trudeau asking for the carbon tax to be lifted from natural gas home heating, the primary heating source in their provinces. Kinew has stated he was discussing this issue with Trudeau before the home heating oil exemption was made. 

Approximately half the homes in Manitoba are heated using natural gas, while the majority use hydroelectricity. 

In a statement released by Manitoba’s Climate Action Team, Kinew’s thoughts were echoed. 

“Decisions surrounding carbon pricing policies should not pit climate change against affordability, but rather be used as an opportunity to find solutions to help people reduce their home heating costs and act on climate. We can do both together.” 

While making no suggestion the federal government intends to alter their stance, a statement from the office of Finance Minister Chrystia Freeland said the federal government offers “National solutions to help Canadians” who are having difficulties with their cost of living. 

Since Wab Kinew has asked the federal government to remove carbon tax from natural gas-heated homes, his stance on carbon tax aligns with his predecessors Heather Stefanson and Brian Pallister. Opposition to the carbon tax was among Stefanson’s order of business while campaigning for the fall election in Manitoba. Some Manitoba PCs were vociferous about Kinew’s new perspective. 

“The NDP government’s own finance minister said just last year that suspending the carbon tax would actually cost the average Manitoban money,” Fort Whyte MLA Obby Khan and PC finance critic Obby Khan said. “Why did it take pressure from all other premiers, the federal NDP, and other provincial NDP parties for Kinew to finally stand up for Manitobans?” 

Trudeau has remained firm that there will be no further exemptions to the carbon tax similar to the one made for home heating oil. At the end of October, he flatly said, “There will be no more carve-outs coming.” 

In an open letter, the premiers of five provinces have asked the Prime Minister to meet with them to discuss further carbon tax exemptions beyond home heating oil to include all forms of heating. Tim Houston, Scott Moe, Danielle Smith, New Brunswick Premier Blaine Higgs and Ontario Premier Doug Ford are the five signees hoping for an appointment. 

The open letter states, “Many Canadian households do not use home heating oil and instead use all forms of heating to heat their homes. Winter is coming, and these people also deserve a break. It is of vital importance that federal policies and programs are made available to all Canadians in a fair and equitable way.” 

The letter calls for the federal government to lift the federal carbon tax from all forms of home heating.  

Just last week, the federal Liberal party and Bloc Quebecois defeated a motion to extend a carbon tax exemption to all forms of home heating. The motion was proposed by the Progressive Conservatives and was backed by the NDP. 

Nova Scotia premier Tim Houston has said that his government has never had faith that the tax would effectively reduce the use of home heating oil, nor will it reduce emissions. 

The Atlantic provinces only began paying the federal carbon tax in July after provincially operated systems of greenhouse gas reduction were deemed to have failed. Their payments of carbon tax only lasted until October, when Trudeau announced a three-year lift of the taxes from oil-based heating, most of which is found in the Atlantic provinces. 

BC Premier David Eby has said the carbon tax is effective and works well in his province. BC has had its own carbon tax in place since it created the first carbon tax in North America in 2008. He did not oppose the demands of the other Western premiers. 

– Matthew Harrison, U Multicultural