Playing defence on the carbon tax has put Trudeau's Liberals on the defensive

Jonathan Wilkinson, the minister of natural resources and energy, is not one to raise his voice. But as the Conservatives needled the government over its new carbon tax carve-out on Tuesday, Wilkinson started to get a bit shouty. 

"Mr. Speaker, in the House, one thing is clear. The Conservative Party has no belief in the reality of climate change and no plan to fight it," Wilkinson said.

"This government is focused on ensuring that we are addressing affordability challenges in a thoughtful way, while concurrently addressing the climate issue. It is a shame in the House, it is a shame in the country that we have a political party that denies the reality of climate change and is willing to give up the future of our children."

Wilkinson, who was environment minister from 2019 to 2021, might have a good reason to feel frustrated. While the Conservatives are promising to do less (possibly much less) than the Liberals have on climate policy — Pierre Poilievre has vowed to completely repeal both the carbon tax and clean fuel regulations — Wilkinson and his fellow Liberals are the ones who spent the past week on the defensive.

But that's because the actual thoughtfulness of the government's policy agenda is now in question. A week after Prime Minister Justin Trudeau's announcement, it seems the Liberals may have only exchanged one problem for another that might be worse.

In defending their decision to exempt home heating oil from the carbon tax for three years — and expand a program that helps those who use heating oil to install electric heat pumps — the Liberals point out that oil is significantly more expensive than other forms of energy right now and is disproportionately used by those on low incomes. That means that those using oil are facing not only cost-of-living pressures, but might also have a hard time paying the up-front costs of installing a more efficient system.

Those facts do make the case for helping those households with the cost of a heat pump. They don't necessarily make the case for exempting those households from the carbon tax. By granting one exemption, the Liberals practically invited the questions and criticisms they've faced over the past week.

Policy experts were warning about the downside of applying the federal levy inconsistently even before the Trudeau government made the change for heating oil last week. Political opponents of Trudeau's climate agenda have since leapt upon the inconsistency with zeal, arguing that households who use natural gas should be entitled to the same break.

The choice to provide an exemption has also been held up as proof that, contrary to the Liberal government's arguments about the carbon tax rebate, the tax is imposing a significant burden on households.

Public policy is not always perfectly logical. A government changing course, or even reversing itself, isn't necessarily a sin. And the internal pressure to do something about the carbon tax might have been immense.

But the Liberal response to concerns in Atlantic Canada has made it harder for them to directly rebut the arguments now coming at them from other directions.

Despite speculation that the Liberals will end up having to carve other pieces out of the carbon tax, Trudeau has publicly ruled out further exemptions. Drawing an even brighter line, Steven Guilbeault has said there will be no more exemptions as long as he is environment minister.

The Liberals could try to simply ride out the political storm. And their political opponents might even make that easier by overplaying their own hands — as Saskatchewan Premier Scott Moe seems to have done by vowing that he'll order Saskatchewan's natural gas utility to refrain from collecting the federal carbon tax.

Or the Liberals could try to undercut the cries of unfairness by heeding the NDP's call to remove the GST from home heating bills, or by extending the heat pump affordability program to cover households that use natural gas and propane.