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.”
Demands for government intervention in Air Canada labour talks could negatively affect airline competition in Canada, the CEO of travel company Transat AT Inc. said.
“The extension of such an extraordinary intervention to Air Canada would be an undeniable competitive advantage to the detriment of other Canadian airlines,” Annick Guérard told analysts on an earnings conference call on Thursday.
“The time and urgency is now. It is time to restore healthy competition in Canada,” she added.
Air Canada has asked the federal government to be ready to intervene and request arbitration as early as this weekend to avoid disruptions.
Comments on the potential Air Canada pilot strike or lock out came as Transat reported third-quarter financial results.
Guérard recalled Transat’s labour negotiations with its flight attendants earlier this year, which the company said it handled without asking for government intervention.
The airline’s 2,100 flight attendants voted 99 per cent in favour of a strike mandate and twice rejected tentative deals before approving a new collective agreement in late February.
As the collective agreement for Air Transat pilots ends in June next year, Guérard anticipates similar pressure to increase overall wages as seen in Air Canada’s negotiations, but reckons it will come out “as a win, win, win deal.”
“The pilots are preparing on their side, we are preparing on our side and we’re confident that we’re going to come up with a reasonable deal,” she told analysts when asked about the upcoming negotiations.
The parent company of Air Transat reported it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31. The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
It attributed reduced revenues to lower airline unit revenues, competition, industry-wide overcapacity and economic uncertainty.
Air Transat is also among the airlines facing challenges related to the recall of Pratt & Whitney turbofan jet engines for inspection and repair.
The recall has so far grounded six aircraft, Guérard said on the call.
“We have agreed to financial compensation for grounded aircraft during the 2023-2024 period,” she said. “Alongside this financial compensation, Pratt & Whitney will provide us with two additional spare engines, which we intend to monetize through a sell and lease back transaction.”
Looking ahead, the CEO said she expects consumer demand to remain somewhat uncertain amid high interest rates.
“We are currently seeing ongoing pricing pressure extending into the winter season,” she added. Air Transat is not planning on adding additional aircraft next year but anticipates stability.
“(2025) for us will be much more stable than 2024 in terms of fleet movements and operation, and this will definitely have a positive effect on cost and customer satisfaction as well,” the CEO told analysts.
“We are more and more moving away from all the disruption that we had to go through early in 2024,” she added.
This report by The Canadian Press was first published Sept. 12, 2024.
