OTTAWA – On his first day in office, Prime Minister Mark Carney moved swiftly to eliminate the consumer carbon price, a key policy introduced under Justin Trudeau’s government.

Speaking to the media after a Friday afternoon cabinet meeting, Carney emphasized the government’s commitment to immediate action.

“We will be eliminating the Canada fuel charge, the consumer fuel charge, effective immediately,” he announced.

An official order-in-council, signed in front of cabinet ministers and the press, stipulates that the consumer fuel charge will be removed as of April 1, 2025—coinciding with a previously scheduled price increase. However, this change only applies to consumer purchases, while the carbon price for large industrial emitters remains intact.

Additionally, Canadians who have been receiving rebates under the program will receive a final payment in April, covering the upcoming quarter.

Carney had previously committed to scrapping the consumer price during the Liberal leadership race while pledging to strengthen the industrial carbon pricing system.

Agriculture Minister Kody Blois welcomed the move, calling it a positive step given the policy’s divisive nature. He noted that Atlantic Liberal MPs had previously secured a carve-out for home heating oil in 2023.

Opposition Response

The consumer carbon price had been a focal point of Conservative criticism, with party leader Pierre Poilievre making “axe the tax” a central part of his message.

On Friday, Poilievre argued that Carney’s government cannot fully eliminate the tax without recalling Parliament to amend the existing law.

“He might be trying to hide the carbon tax by temporarily pausing its collection before the election,” Poilievre claimed at a press conference, holding up a copy of the legislation. He also questioned whether Liberal cabinet ministers—who previously supported the carbon tax—would permanently abandon it.

Despite these claims, the government is legally able to eliminate the consumer carbon price without legislative changes. The 2019 Greenhouse Gas Pollution Pricing Act allows the fuel price to be set by regulation, giving the cabinet the authority to adjust it through an order-in-council.

The charge was initially introduced at $20 per tonne and had been set to rise to $95 per tonne in April. Its removal is expected to reduce gasoline prices by 17.6 cents per litre and lower natural gas costs by over 15 cents per cubic metre.

Future Climate Policy

The revenue collected from the consumer carbon price was not retained by the federal government but was instead redistributed to Canadians through the Canada Carbon Rebate program, as well as to Indigenous and territorial governments, businesses, and non-profit organizations.

Former environment minister Steven Guilbeault, now serving as Minister of Canadian Culture and Identity, defended the decision to maintain the industrial carbon price.

“The industrial pricing system provides three times more emissions reductions than the consumer portion,” he noted.

Environmental groups reacted with concern, with Greenpeace Canada’s senior energy strategist Keith Stewart blaming misinformation for the carbon price’s unpopularity.

“Poilievre successfully misled the public about the consumer carbon tax,” Stewart said in a statement, while also supporting Carney’s commitment to strengthening industrial carbon pricing.

Poilievre has vowed that a Conservative government would completely eliminate the consumer carbon price. However, he has yet to clarify his stance on the industrial carbon tax, promising more details when the election campaign officially begins.

With “axe the tax” remaining a central Conservative slogan, the carbon pricing debate is likely to play a key role in the upcoming election.