Canada doubling carbon price rebate rural top-up, pausing charge on heating oil: Trudeau

Carbon tax debate WATCH: Saskatchewan has vowed that beginning Jan. 1 carbon tax collection on home heating will end. Noah Rishaug reports.

The Canadian government is doubling the pollution price rebate rural top-up rate, and implementing a three-year pause to the federal carbon price on deliveries of heating oil in all jurisdictions where the federal fuel charge is in effect, Prime Minister Justin Trudeau announced Thursday.

The Climate Action Incentive Payment rural top-up rate will be increasing from 10 to 20 per cent of the baseline amount, starting in April 2024. It's a move Trudeau said is to recognize the higher energy costs rural residents are facing.

"If you live in a rural community, you don't have the same options that people who live in cities do. We get that. So, this is more money in your pocket to recognize those realities, even as we continue to fight climate change," Trudeau said.

The temporary pause on the fuel charge on heating oil for homes and small businesses will begin in 14 days, and will apply in all jurisdictions where the federal fuel charge is in effect. The Liberals estimate that this break— slated to be in effect until March 31, 2027—will save an average household that uses heating oil $250 at the current rate.

However, the prime minister acknowledged that with this break, the revenues the government collects will "go down slightly," and as a result the rebate cheques "will be slightly lower."

In addition, part of what the Prime Minister's Office is billing as a "new energy affordability package," the federal government is also rolling out plans to make it easier for Canadians to switch to an electric heat pump to heat their homes, starting first in Atlantic Canada.

This pilot project will see an upfront payment of $250 for low-to-medium-income households that heat their homes with oil. It also includes plans to enhance a program that provides Canadian households funding to help make the transition from heating oil to more efficient and environmentally-friendly electric heat pumps.

Trudeau said the Liberals are increasing the maximum amount of funding towards the purchase and installation of a heat pump from $10,000 to $15,000. They will be doing this by adding up to $5,000 in "grant funding to match provincial and territorial contributions," which, according to a PMO release, would mean most households will be able to get their pump for free.

"To be blunt, the price signal on heating oil is not resulting in enough people being able to switch to electric heat pumps, despite people wanting to move to these cleaner home heating options," Trudeau said. "As a government that is focused on evidence and data and outcomes, and that is listening to Canadians, we heard you."

PM BACKED BY ATLANTIC MPS

The prime minister made the major announcement backed by his Atlantic caucus, among which there has been divisions over the Liberal carbon pricing plan, given the proportion of Atlantic Canadians who live outside urban areas.

Amid the current cost-of-living crunch, the Liberals have been facing pressure— specifically from Atlantic and rural MPs, as well as regional and opposition politicians—to ease off on its carbon pricing policies.

Introducing the prime minister, Atlantic caucus chair and Kings-Hants, N.S. MP Kody Blois—whose riding Conservative Leader Pierre Poilievre is holding an "Axe the Tax" rally Thursday night—called it a meaningful announcement for his constituents.

"Today's adjustments and programming are welcomed as a better way to ensure that our programs are meeting the needs of all Canadians," Blois said, thanking his Atlantic colleagues for their "steadfast" advocacy.

"But it is important to remember why we have instituted a national price on pollution across the country. It is one of the most effective ways to be able to fight climate change and reduce emissions."

In an interview with CTV News Atlantic's Todd Battis on Thursday, Poilievre was asked what brought him to Blois' riding.

"Local residents are furious at their Liberal MP because he's voted to quadruple the carbon tax… it's incredible. Quadruple the carbon tax when people can't afford to eat," Poilievre said.

Quickly firing off a response to the prime minister's climb-down, Poilievre accused Trudeau of flip-flopping on his climate plans.

"After plummeting in the polls, a flailing, desperate Trudeau is now flipping and flopping on the carbon tax as I am holding a gigantic axe the tax rally in a Liberal-held Atlantic riding," Poilievre posted.

'POLITICALLY ON THE ROPES'

Asked Thursday if this move is in response to Poilievre's focus on the carbon tax, the prime minister said no. He was also adamant that the federal government will be achieving its environmental targets "even better" now.

"This is an important moment where we're adjusting policies so that they have the right outcome," the prime minister said.

Reacting to the news, NDP MPs called the move "long-overdue," but are pushing for reprieve for families across the country struggling to make ends meet.

"For months, the NDP has been urging the Liberals to drop the GST on home heating fuel to give hardworking Canadians a break on their bills," said NDP environment critic Laurel Collins and NDP natural resources critic Charlie Angus in a joint statement.

"At the same time, the climate crisis has taken a turn … People expect the government to take action to tackle this crisis."

CTV News' official pollster Nik Nanos said Trudeau’s break on the carbon tax is "indicative of a government that's politically on the ropes."

"Right now the Conservatives have a massive advantage. They're in majority territory. The Liberals are poised to lose seats. If an election were held today, they could lose upwards of 13 seats in Atlantic Canada, which is usually bedrock support. So, this is about the Liberals trying to salvage the political situation," Nanos said.

He said Canadians shouldn't be surprised if they see further chipping away at the policy as the next campaign nears, in an effort to shore up more support, something climate change advocates are worried about.

"This is about dollars and cents, it's not necessarily about climate change," Nanos said. "It's about paying the bills right now."