NDP to back Conservative motion calling for carbon price off all heat sources

OTTAWA -

The New Democrats intend to back the Conservatives on a motion to pull the carbon price off all home heating until after the next election, NDP House Leader Peter Julian said Thursday.

"The reality is we need to make sure that affordability is available to all Canadians and that's why we're supporting this motion," said Julian.

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The decision delivers another political blow to the Liberals, who have been scrambling for days to defend their decision to pause the carbon price on home heating oil for the next three years.

The change is intended to give people who still use that fuel the time and money that is needed to replace it with electric heat pumps.

The heating pump controversy has added to concerns within the Liberal caucus about the government's decisions. Even a prominent Liberal senator, Percy Downe, called this week for Prime Minister Justin Trudeau to begin planning his exit.

Trudeau dismissed that on Thursday, pretending at first that he didn't even know who reporters were asking about.

"Oh, Percy. Oh yeah, how's he doing?" he said, with a grin.

Reporters pushed for an answer, saying Downe wanted Trudeau to resign.

"Oh, well, I wish him all the best in the work that he's doing," the prime minister said.

The latest controversy kicked off last week when Trudeau suddenly announced the home heating oil pause.

Home heating oil had been exempt from carbon pricing in Atlantic Canada until this past summer. That's when the four provinces were added to the national carbon pricing system, replacing a provincial version that had previously been in place.

Provincial governments, along with Atlantic Liberal MPs, lobbied hard in the months leading up to the July 1 change to keep home heating oil off the carbon price list.

The cost of the oil itself has risen more than 70 per cent in the last two years.

The federal Liberals initially responded with a program to help heating oil users replace their oil furnaces with electric heat pumps.

The program, which for low-income users would cover the entire cost of switching to heat pumps, is available to all provinces that agree to put up some of the financial support themselves.

Thus far, the only ones to do so are Newfoundland and Labrador, Nova Scotia and Prince Edward Island, where between 14 and 53 per cent of households rely on heating oil.

The announcement last week increased the grants available under that program, increased the carbon price rebate given to rural Canadians and exempted heating oil from falling under the carbon-pricing policy for three years.

Opposition parties and Western premiers cried foul, accusing the Liberals of regional favouritism to save their political skin in provinces where their usually rosy polling numbers have cratered since July.

Julian said that the NDP, which usually supports carbon pricing, tried to get the Conservatives to agree to a motion to pull the GST off all heating sources, rather than the carbon price.

But when that didn't happen, and since the Conservative motion "doesn't deny climate change" exists, the NDP caucus decided to support the motion out of a sense of fairness.

"We believe that the panicked reaction of Liberals a few days ago, it seemed to be tied to electoral chances more than anything else," Julian said.

He said it created a situation in which people in some parts of the country will receive help to keep their homes heated in a "difficult winter while they're struggling" -- but "other Canadians wouldn't benefit from that."

Conservative Leader Pierre Poilievre tabled the motion Thursday morning, after his party spent most of every question period throughout the week on the matter.

"The prime minister has decided to create two classes of citizens," Poilevre said, debating his motion in the House of Commons.

While they themselves billed the announcement as an "update on affordability measures for Atlantic and rural Canadians," the Liberals now say it's really a program that helps people across the country.

As a share of all heat sources, heating oil is far more prevalent in Atlantic Canada. But in raw numbers, more than three in four households that use the oil are not in the Atlantic.

Labour Minister Seamus O'Regan said it's not just an Atlantic Canadian issue, and there are many times when government programs seek to solve inequities that are more acute in some places than others.

"This country is built on carve-outs and pauses and compromises," he said. "That's the only way this country runs."

The carbon price is set based on the amount of greenhouse-gas emissions that are produced. This means the levy is about 40 per cent higher for home heating oil than it is for natural gas.

While the carbon-price rebates are intended to offset the cost of carbon pricing for most Canadians, Energy Minister Jonathan Wilkinson said that for people on home heating oil, the rebates in many instances don't cover it.

The rebates are set by each province based on the total carbon price collected. They are are distributed equally among residents, not based on how much carbon price each person individually pays.

Wilkinson said that not only is natural gas a lot cheaper to buy, but the carbon price rebates are also enough to cover those costs.

The parliamentary budget officer's assessment of carbon-price rebates versus the carbon-price cost by province shows that nationally, about eight in 10 Canadians get back more than they pay.

But in the three provinces with the highest proportion of heating oil use, the benefit is smaller or non-existent for more people. In Nova Scotia, about 60 per cent of households were expected to get less than they paid, the PBO report said.

Liberal Atlantic caucus chair Kody Blois said in the House of Commons that nobody can deny that people who use home heating oil are hurting more than others.

He said in Ontario, home heating oil bills average about $3,400 a year compared with $900 a year for natural gas. In Regina, he said, it's $4,500 for heating oil versus $1,400 for natural gas, and in Vancouver it's $1,800 for heating oil and $600 for natural gas, on average.

This report by The Canadian Press was first published Nov. 2, 2023.