Mark Carney takes the stage in Canada’s carbon tax theatre, putting politics over policy

Every Sunday afternoon, at one of the busiest intersections in downtown Mississauga, a group of people gather at each corner to hoist Canadian flags and huge protest banners amid light poles, construction cones and the general detritus of a busy, growing city.

Since late 2023, one of the largest banners has said the same thing every week. Big, bold, black letters decry the keystone of Canada’s climate action for the past six years: “Axe the tax.” 

By now, the phrase is so familiar with most Canadians that it requires little explanation. On April 1, 2019, the Canadian government decided to disincentivize carbon dioxide emissions — and by extension, the use of fossil fuels that create them — by putting a price on it. It was an effort to curb the global warming that results from emissions and leads to extreme weather like wildfires and flooding, which we’ve seen in greater frequency in recent years across the country.

The pricing scheme had two parts: one for industry and another one for consumers, both of which put a levy on fuels like gasoline and natural gas to push buyers towards cleaner alternatives. The federal government sends money collected from both carbon prices back to Canadians in the form of quarterly cheques. For a single adult in Ontario, those cheques were $140 a piece. And as of 2023, the last reported year, emissions across Canada are falling for the first time. 

Despite the catchy rhyme, the carbon price is a regulatory charge, not a “tax”, since its goal is to change behaviour, not raise money for government spending. But on day one, Conservative politicians and opposition leaders deemed it as such and quickly doomed it to its demise. 

Through their tweets and podium placards, the three-word slogan spread into bumper stickers and protest flags. Before Canada had time to evaluate the actual effectiveness of a Nobel-prize-winning climate policy in action, it was clouded in drama that played out in the streets and the courts. That drama continues today, even as the consumer carbon price’s time of death is upon us, putting in question the future of serious and urgent climate action in Canada. 

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The Mississauga anti-carbon-taxers were out in full on March 9 — the same day Mark Carney was chosen as the new Liberal leader and Canadian prime minister, and vowed to “immediately eliminate the divisive consumer carbon tax.” The promise was met in a cabinet meeting with thundering applause and cheers, as the very same political party that ushered in the ambitious idea raucously celebrated its demise.

Carney’s decision to cut the carbon price marks a stark shift for the economist-turned-politician, who was once a strong proponent of the scheme. In his 2021 book Values, Carney wrote carbon pricing is “one of the most important initiatives” and “the best approach” to reducing emissions. He called Canada’s version “a model for others,” one that has “carefully navigated the complexities of Canadian federalism” — which turned out to be very not true, as several provinces fought the price at the Supreme Court, arguing it limits their ability to dictate climate policy on their own terms.

The carbon price “will grow jobs while ensuring that the majority of Canadians are made whole through quarterly rebates of this price on pollution,” Carney wrote in his book. His point being that, theoretically, any financial burden caused by the levy at the pumps is made up for by the rebates, with those who reduced their fossil fuel usage receiving a little extra cash as a reward. 

Four years ago, Carney was clear eyed about the way carbon pricing could mitigate the risks and damage of the climate emergency, but now, apparently not. In fairness, a lot has happened since that affects both affordability and energy usage, from rapid inflation to a gradual uptick in electrification that should reduce the use of fossil fuels. In that time though, the industrial carbon price has proven to be effective at reducing emissions, while the consumer carbon price’s impact on affordability has been found repeatedly to be negligible with it contributing less than 0.5 per cent to increases in consumer prices since 2019. 

But he didn’t cite any of that when scaling back the carbon price. 

Instead, he focused on the social impacts of the carbon price, directly addressing the “axe the tax” movement, recognizing that it would likely lead to an election loss for the Liberals. And to appeal to the raucous group, he enthusiastically embraced its performative energy. It was a calculated move, as politics beat policy once again. 

“The consumer carbon tax is not working,” he wrote on X on March 14, although it did marginally reduce emissions. “It’s become too divisive — at a time when Canada needs to be united,” the post continued alongside a Donald Trump-esque video of him signing an order in a red folder with a bold black marker to move the consumer price per tonne of carbon to $0, and then presenting it for the room to see.

The video was followed by another post several hours later, with the phrase “Mark Carney got it done,” accompanying a green graphic that, in big, bold letters similar to the axe-the-tax font used by opponents and protestors, said, “Mark Carney cancelled the carbon tax.”

The theatrics were odd, and the reactions equally eye-roll-worthy. In the minutes and hours that followed, elected officials across the country responded joyously, many of them writing “finally.” 

“Thank you, better late than never!” Nova Scotia Premier Tim Houston said in a post on X. 

“Good riddance to the worst tax ever,” Ontario Premier Doug Ford said, also on X.

The fate of Canada’s industrial carbon tax after the federal election

For better but probably worse, climate action in Canada has become synonymous with carbon pricing. Its execution whittled to political slogans is a visceral example of how climate science and policy has increasingly become politicized at a time when it is desperately needed. That’s a problem when the consequences of this decision could be massive, the alternatives are missing from the discussion and parts of the country continue to suffer from fires, heat, drought and floods. 

Carbon pricing was Canada’s biggest attempt at reducing emissions and mitigating its harms. Removing half of the scheme sets up its downfall here and also deters any other jurisdiction considering it. As the last rebate is distributed in April, there remain unanswered questions about Carney’s promise to create a better set of measures that will both address global heating and offer financial support.

And then there’s the fate of the other half. Carney has committed to keeping the mandatory industrial price on pollution, saying that in the future it will become a condition for trade with European countries and more. But Conservative Leader Pierre Poilievre has already taken to calling for its removal, despite its proven effectiveness, now with larger “axe the tax” podium signs. 

The Canadian Climate Institute estimates the industrial carbon price is responsible for 23 to 39 per cent of projected emissions reductions between now and 2030, a significant reduction to prevent the further warming of the planet. These estimates assume that without the federal price, provinces won’t have the incentive to strengthen their own industrial pricing schemes, taking us further away from international climate targets we’ve committed to and are not close to meeting. 

There will be more drama and more political theatre in the weeks and months to come as Poilievre continues to rail on the carbon price, and Carney reminds people he ended half of it. This spring’s election will be another where the climate emergency and all its impacts won’t take up the space on the campaign trail or ballot that they should.

Emissions and their ruinous effects can’t be addressed with three-word slogans. As the last six years of fierce debate over the carbon tax has shown, there is also no single magic bullet. What we need is a broader and more nuanced discussion about what measures will curb pollution, and what will happen if we don’t take them. But that discussion has been drowned out by misinformation spread and accepted widely — including the rollback on climate work from the Donald Trump administration in the U.S. and the increasing dependency on the fossil fuel natural gas in parts of Canada — meaning there’s little space for the truth and action to slip in. At least the carbon price was offering certainty to people and businesses in a time of unpredictability, something an economist like Carney previously touted.

If Carney wanted to take the air out of the “axe the tax” chorus by joining in the theatrics, he failed. This past Sunday, a week after he was sworn in and signed off on the end of the consumer carbon price, protestors were back at the central Mississauga intersection. In the middle of the road, they had once again pinned a long white banner bearing the three-word rhyme that has become so powerful Canada easily surrendered an important battle in the fight for our lives against climate change.