Nfld. & Labrador

N.L. politicians heated over federal carbon tax announcement

Newfoundland and Labrador's three political parties had mixed reactions to the federal government's announcement Tuesday of its new carbon pollution pricing benchmark.

The new tax will kick in July 1, with rebates to follow shortly

A grey home heating oil tank next to house with bright red siding.
The federal government's new carbon pricing benchmark kicks in on July 1 in Newfoundland and Labrador. (Jeremy Eaton/CBC)

The federal government on Tuesday announced its new carbon pricing benchmark, which will raise the cost of fuel in Newfoundland and Labrador — although residents will get quarterly payments that can offset the expense.

Environment and Climate Change Minister Steven Guilbeault said Newfoundland and Labrador will be one of nine provinces and territories to fall under the federal government's backstop carbon tax.

"We've created a pollution-pricing system where, over time, it becomes more expensive to pollute," he said.

On July 1, the price of fuel will rise — but that month, people living in Newfoundland and Labrador will receive the first of three "climate action incentive" payments. Residents will get the cheques regardless of how much fuel they use.

Newfoundland and Labrador residents will get their first climate action incentive cheques in July. Individual adults will receive quarterly payments of $164, with an additional $82 if a second adult lives in the home. Households will also get $41 for each child who lives in the home, meaning a family of four will get annual payments of $1,312.

"Eight out of 10 households will get more money back than they pay," he said.

When carbon pricing in Canada began in 2019, the federal government approved the provincial government's approach to the carbon tax, which exempted home heating fuel.

Earlier this year, the provincial government submitted the same plan, along with a letter from Premier Andrew Furey, who begged the federal government not to impose the tax on home heating fuel in Newfoundland and Labrador, where about 48,000 homes are heated using oil.

Guilbeault's announcement confirms the federal government has rejected Furey's request.

'Not listening'

Provincial Environment and Climate Change Minister Bernard Davis said he was disappointed by the announcement.

"We're not opposed to the … carbon tax, we're opposed to the carbon tax as it exists today," he said.

A head and shoulders shot of a person wearing a dark jacket and red and blue tie.
Provincial Environment and Climate Change Minister Bernard Davis says a 45-minute phone call with federal Environment and Climate Change Minister Steven Guilbeault wasn't enough to exempt Newfoundland and Labrador from the higher federal carbon tax. (Jeremy Eaton)

Davis said market pressures and volatile oil prices are already convincing Newfoundland and Labrador residents to move away from fossil fuels, and they don't need an additional tax. He said the provincial and federal governments have had success working together but have conflicting views on the carbon tax. The other Atlantic premiers asked for similar exemptions or deadline extensions.

"The federal government's not listening to its premiers," he said.

Since 2019, the province has collected money from its own carbon tax system, but following the federal decision, that system will be repealed.

A different way

On Monday, the federal government announced funding for low-income households to move off oil heat to heat pumps, but Davis said it'll be a challenge for many homes to make the transition.

Seamus O'Regan, MP for St. John's South-Mount Pearl and federal labour minister, defended the announcement

"It's a way that we're able to control prices and make sure that the price on pollution … that's currently applied by the province will go back to consumers," he said.

A person wearing a white shirt and orange tie folds his hands while speaking.
Federal Labour Minister Seamus O'Regan defended the carbon tax on Tuesday. (CBC)

He said the tax is meant to incentivize consumers to stop using fossil fuels.

"When you pollute less, you won't be paying for that pollution through the price on pollution, but you still get to keep that cheque," he said.

He acknowledged that the provincial government is against the plan, and said the federal government is also concerned about affordability.

"It's just a different way of going about it," he said. 

Provincial opposition parties react

Interim PC Leader David Brazil condemned the announcement, saying the federal backstop represents a "colossal failure" by the Furey administration.

"People have been through enough hardship over the past couple of years, the financial burden on people right now, to impose a tax like this is obviously going to add more hardship to the people of Newfoundland and Labrador, particularly in rural Newfoundland and Labrador," he said.

Brazil said the provincial government didn't do enough to convince the federal government to exempt home heating fuel from the tax. He acknowledged the federal incentive program and rebate but said they won't do enough to offset the cost.

"People who are relying on home heating fuel get the same as someone who doesn't have to worry about a 20 per cent increase in a month in the cost of their fuel consumption," he said.

Two pictures of two men in suits.
Interim PC Leader David Brazil and interim NDP Leader Jim Dinn had mixed reactions to the announcement that the federal carbon backstop will be applied to Newfoundland and Labrador. (Jeremy Eaton/CBC)

Interim NDP Leader Jim Dinn said the provincial Liberals and PCs are "clouding" the issue.

"A pox on both their houses," Dinn said.

He said the province is already paying for the impact of climate change.

"You've just got to think of the droughts, the wildfires, the destruction of crops, Fiona — Hurricane Fiona — and what it did here and the cost to this province, and it's going to get worse," he said.

"The people who are going to pay for it are not going to be the oil company executives, it's going to be people like you, me, people trying to make ends meet."

Dinn said the provincial NDP supports a price on pollution. He said the provincial government could remove its own HST on oil products to make them more affordable for residents.

Read more from CBC Newfoundland and Labrador


Darrell Roberts is a reporter for CBC Newfoundland and Labrador in St. John's.

With files from Jeremy Eaton


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