Freeland to scrap consumer carbon tax if she becomes next Liberal leader: source

Liberal MP Chrystia Freeland, former minister of finance and deputy prime minister, leaves after attending a meeting of the Liberal Caucus, in West Block on Parliament Hill in Ottawa, on Wednesday, Jan. 8, 2025. THE CANADIAN PRESS/Justin Tang (Justin Tang/The Canadian Press)

As former finance minister Chrystia Freeland prepares to launch a Liberal leadership bid, a source close to her says scrapping the controversial consumer carbon tax will be one of her policy planks.

“She is ready to make difficult decisions to meet our emissions targets and make sure big polluters pay for their outsized emissions. But she will not fight Canadians on a policy they have been clear, they do not support,” the source tells CTV News. “That’s why Chrystia Freeland will replace the consumer carbon price with a system that will work within our federation and will be developed collaboratively with provinces and territories.”

Freeland had previously defended the carbon tax during her time in Prime Minister Justin Trudeau’s cabinet.

Sources say Freeland is set to announce her leadership run ahead of U.S. president-elect Donald Trump’s inauguration on Monday. Freeland also intends to announce dollar-for-dollar retaliatory tariffs to counter Trump’s threat of 25 per cent tariffs on all Canadian goods.

In a post shared on X on Wednesday, Freeland addressed registered Liberals, saying she is “grateful for the chance to hear from you and listen to your ideas” and that she will “have much more to say very soon!”

A number of Liberal MPs have publicly endorsed Freeland as a candidate for the Liberal leadership. Winnipeg MP Ben Carr and former cabinet colleague Randy Boissonnault added their names to the growing list of Liberals throwing their support behind her.

Freeland left cabinet on Dec. 16 in a stinging resignation letter, saying she was at odds with Trudeau over a number of policies, including the GST tax holiday break and $250 cheques the government had planned to hand out to working Canadians.

Freeland called them “costly political gimmicks,” which she didn’t think Canadians can afford with the economic threat of tariffs looming.

Her resignation, coupled with growing calls for a change in leadership, pushed the prime minister to announce his resignation as Liberal leader effective March 9.

Mark Carney is expected to announce he is entering the Liberal leadership race on Thursday in Edmonton. The former governor of the Bank of Canada and Bank of England has also hinted that he may also make changes to Canada’s carbon pricing.

In an interview on “The Daily Show” with Jon Stewart on Monday night, Carney stopped short of endorsing the policy, noting much of Canada’s overall emissions come from industrial emitters and not consumers.

“We need to do it in a way that Canadians today are not paying the price,” Carney told host Jon Stewart.

The consumer carbon tax came into effect in 2019 under the Trudeau government and has grown to be unpopular among Canadians. The Conservatives – who have pledged to “axe the tax” – have used the policy to attack Liberals for years. The tax has also received significant pushback from most premiers, including Liberal Newfoundland and Labrador Premier Andrew Furey, and some Liberal MPs have even expressed a desire to scrap it.

This April, the price on carbon is set to increase to $95 a tonne from $80 a tonne in provinces where the federal backstop applies, costing drivers an extra 3.3 cents per litre at the pump. The tax is scheduled to increase another $15 each year until it reaches $170 a tonne in 2030. To offset the cost, Canadians who live in regions where the backstop applies will receive a quarterly payment known as the “Canada Carbon Rebate.”