Cancelling carbon tax a 'net negative,' says Ottawa in response to Furey's request

Newfoundland and Labrador Premier Andrew Furey pushed back Wednesday against the deputy prime minister's office, which said its controversial carbon tax increase is essential to fight climate change.

Furey said in an open letter Tuesday that the carbon tax increase, set for April 1, is a punishment for residents at a time of soaring prices and stagnant wages.

The tax hike would result in higher prices for fossil fuel products. For instance, the tax on gasoline is expected to rise from $0.1431 per litre to $0.1761.

Jesse Bartsoff, a spokesperson for the deputy prime minister's office, said the carbon tax will account for nearly one-third of Canada's emissions reductions by 2030 and put more money in the pockets of those who need it.

"In Newfoundland and Labrador, the average lower-income family gets $430 more back than they pay. Cancelling the Canada carbon rebate would be a net negative," Bartsoff said in an emailed statement.

He adds that the rebates through the tax ensure "that eight out of 10 Canadians get more back than they pay, with lower-income families benefitting the most."

Furey told reporters Wednesday the carbon tax indirectly costs consumers due to the tax applied to the shipping of goods into the province, making food and other products more expensive. 

"I know that the federal government has worked hard and I applaud them, for increasing the rural rebate," Furey said.

"But there is still a gap and that's not even considering what I think is … very punishing clean fuel standards on top of the carbon tax.

"Ultimately, we're trying to change behaviours. We don't have that ability to change behaviours here in Newfoundland and Labrador right now. Not because people don't want to change. It's just that [options to change] don't exist."

The provincial PC Party tweeted Tuesday that it agrees with federal Conservative Party Leader Pierre Poilievre's call to axe the carbon tax entirely.

"Our own premier recently wrote his federal partner in Ottawa about spiking the hike," said Opposition leader Tony Wakeham on Wednesday. "And he was told quite bluntly today, no."

Wakeham says that instead of using taxation to encourage the transition to renewable energy, governments should invest in technology to harvest green energy in the province, such as wind and hydro developments.