Government moves to purge consumer carbon pricing from law

Prime Minister Mark Carney speaks before signing a decision note to eliminate the consumer carbon price on Parliament Hill in Ottawa on Friday, March 14, 2025. THE CANADIAN PRESS/Justin Tang

OTTAWA — The federal government moved on Tuesday to purge consumer carbon pricing from law, effectively putting an end to what was once the keystone of the Liberals’ climate policy.

In a notice of motion tabled in the House of Commons, the government signalled it intends to repeal the law after the government used regulations to end the consumer carbon price in March. That move was Mark Carney’s first official act after becoming prime minister.

That move fulfilled a promise he made during his Liberal leadership run, having called the carbon pricing policy “too divisive.”

The Conservatives claimed during the election campaign that Carney would end up bringing back consumer carbon pricing because the law itself hadn’t been repealed -- even though Parliament was not sitting when the policy was ended.

“I call it the ‘carbon tax con job,” Conservative Leader Pierre Poilievre told a news conference the day Carney cancelled the consumer carbon price on March 14.

“He’s going to hide the consumer carbon tax for 60 days, and if he’s re-elected, he’ll bring it back bigger than ever, with no rebate.”

In March Carney used a regulation to set the price of the consumer carbon price to zero. However the government is now moving to repeal the law which enabled the policy, effectively ending it for good -- along with the rebate Canadians received from it.

A report from the Canadian Climate Institute in 2024 found that consumer carbon pricing would cut far fewer emissions than a price applied to big industrial emitters. The pricing system for industry accounted for about 80 per cent of total emissions cuts from carbon pricing overall.

Carney has promised to strengthen the industrial policy but has not said how or when that will happen.

Canadian oil and gas companies have pleaded with Carney to repeal the industrial carbon price as well, arguing it has undermined their competitiveness against foreign oil and gas producers.

A document outlining the government’s plan for repealing the consumer pricing portion of the law says it will retroactively repeal all charging provisions in the law back to April 1, 2025, to align with the regulatory changes made back in March.

It says rebate provisions will be repealed as of October and registration provisions will be repealed to give registrants until the end of October to file rebate claims. All remaining provisions are to be repealed effective April 1, 2035.

“This would provide continuity and certainty for final wind down activities, including CRA administrative processes that may continue to rely on existing rules,” the document says.

“Subject to the normal limitation periods in the (Greenhouse Gas Pollution Pricing) Act, the CRA would also continue to have legal authority to make reassessments, and charge payers to file amended returns, in respect of fuel charge obligations that accrued prior to April 1, 2025.”

This report by The Canadian Press was first published May 27, 2025.