Conservative Leader Pierre Poilievre’s symbolic motion calling for more carbon tax carveouts was defeated, but this won’t end the polarizing debate that centres on equity.
For the most part, opposition politicians and provincial governments have focused their attention on pushing for more carbon price carveouts, calling the Liberals’ three-year exemption on heating oil unfair to the rest of Canadians.
But the heating oil exemption is only one of the changes announced by the federal government on Oct. 26. Prime Minister Justin Trudeau also introduced further measures to make switching from oil to heat pumps more affordable, including an upfront payment of $250 for low- to median-income households and increasing federal grants for homeowners from $10,000 to $15,000.
The same equity questions can also be posed about these new supports aimed at getting people off heating oil and onto heat pumps, said Brendan Haley, a policy director with Efficiency Canada, a Carleton University-based think tank.
“The only program in Canada that is dedicated to removing low-income, upfront cost barriers is focused on fuel oil and that still leaves [out] the vast majority of Canadians [who] are struggling to pay their bills right now, who might have unaffordable electricity and natural gas bills,” Haley told Canada’s National Observer in a phone interview.
“The government needs to find a way out of this,” he said. “And one thing it can do that would actually strengthen its climate policy and climate agenda instead of weakening it would be to have a national energy efficiency program for low-income Canadians.”
Statistics Canada reports that in 2021, only three per cent of all Canadian homes relied on home heating oil. Atlantic Canada accounts for almost 25 per cent of all Canadian homes heated with oil, despite the region being home to only six per cent of the total Canadian population, according to Natural Resources Canada.
Federal ministers, including Natural Resources Minister Jonathan Wilkinson, say there is good reason to extend heat pump support to households that heat with oil. Heating oil emits more planet-warming greenhouse gas emissions and is more expensive than other forms of home heating. The policy measures aim to get households off fuel oil as soon as possible by removing the upfront cost barrier of installing a heat pump, Wilkinson explained multiple times over the last week.
“The focus of this program is enabling affordability, getting people off of heating oil, which is more than double on average the cost of natural gas in this country,” said Wilkinson.
While the exemption on home heating oil applies in every jurisdiction where the federal carbon price system is used — Ontario, Nova Scotia, New Brunswick, Manitoba, Prince Edward Island, Saskatchewan, Alberta and Newfoundland and Labrador — the new heat pump supports are being rolled out in Atlantic Canada first because Nova Scotia, P.E.I. and Newfoundland and Labrador already signed on to co-deliver the oil to heat pump affordability program, according to Natural Resources Canada. Wilkinson said all provinces are welcome to partner with the federal government to deliver support for low- and middle-income households in their jurisdictions, too, adding that his department is in talks with B.C. and New Brunswick to do just that.
In a recent motion, the NDP called on the federal government to “make eco-energy retrofits and heat pumps free and easy to access for low-income and middle-class Canadians, regardless of their initial home heating energy source.” The Nov. 3 motion brought by B.C. MP Laurel Collins said expanded support for energy-efficient retrofits and heat pumps should be financed by taxing the excess profits of oil and gas companies. Greenhouse gas emissions from the burning of fossil fuels is one of the primary drivers of climate change, and large corporations have an outsized impact on emissions.
The NDP motion also reiterated the party’s previous calls to remove the GST on all forms of home heating to give Canadians in all provinces and territories some relief from high energy prices. MPs say removing the GST is a more equitable approach than expanding exemptions under the federal carbon pricing system because Canadians in all jurisdictions will benefit, instead of just those covered by the federal pricing system.
Unlike the NDP, which sided with the Tories in Monday’s vote, Green MPs Mike Morrice and Elizabeth May voted against Poilievre’s Opposition day motion to create further carbon price exemptions. In a Green Party press release, Morrice put the focus back on corporate profits, pointing out 47 cents of every dollar of inflation is attributable to corporate profits, according to an analysis published by the Canadian Centre for Policy Alternatives in January.
“When compared to decades of Conservative-Liberal policies favouring monopolies and putting public money into private pockets, carbon pricing is but a minuscule part of Canada’s ongoing affordability challenges,” Jonathan Pedneault, Green Party deputy leader, said in the press release. “The key to solving the affordability crisis isn’t to scapegoat the carbon tax and divert anger away from the billionaires who profit from the suffering of Canadians. It is rather to aggressively redistribute wealth, legislate to close the income gap and repatriate key Canadian assets under democratic control, for the benefit of all."
Morrice, May and Pedneault highlighted Morrice’s recent motion calling for a windfall tax on oil and gas companies’ excess profits, a measure the Parliamentary Budget Officer said could bring in $4.2 billion over the next five years.
“One way to improve affordability and reduce emissions at the same time is to help people improve their energy efficiency,” said Haley. The federal government’s Greener Homes program seeks to do this with grants of up to $5,000 and interest-free loans of up to $40,000 for heat pumps and energy-efficient retrofits, like upgrading insulation, installing new windows or other renovations that make your home more airtight. However, these programs require homeowners to pay upfront in order to access the grants and zero-interest loans, so it isn’t feasible for cash-strapped families who can’t wait to be reimbursed, said Haley.
While the new program to help low- and middle-income families switch from oil to heat pumps is welcome, it doesn’t include anything to help families make their home more energy efficient outside of the heat pump, pointed out Haley.
“To not follow those same good building science principles in a low-income program is unfair and unjust and it's a large missed opportunity because it's those insulation and air-sealing upgrades that often really contribute to health improvements and comfort improvements in people's homes,” said Haley. Renovations that reduce your home’s energy use will have an immediate impact on your energy bills, he added.
If the federal government introduced a national energy efficiency program for all low-income Canadians, it would let all Liberal MPs — not just those in Atlantic Canada — communicate they are helping people through energy efficiency, said Haley.
The Liberals have had trouble communicating the carbon pricing and rebate regime, but “showing that there's direct support to help Canadians use less energy is tangible and permanent,” said Haley. “I think it makes sense to people that that is the real way we reduce emissions [and energy bills],” he added.
Low-income people are hardest hit by any cost increases, and that just happens to be where the biggest policy gap is, he pointed out.
Haley thinks the federal government could have avoided this debacle if it had focused on low-income access to energy efficiency when first elected.
Trudeau’s Oct. 26 announcement was a response to affordability concerns repeatedly raised by a group of Liberal Atlantic MPs. Opposition parties and premiers were quick to call the move a desperate and divisive attempt to hold onto Liberal seats in Atlantic Canada.
Natasha Bulowski, Local Journalism Initiative Reporter, Canada's National Observer