The consumer carbon tax is gone. How will that affect Canada's emissions?

The federal government has ended its carbon pricing for consumers, and that's expected to lead to savings at the gas pump. But what did the carbon tax and rebate actually do for the climate? And now that it's gone, what impact will that have on emissions? Here's a closer look.

The federal government's consumer carbon pricing, launched by Justin Trudeau's Liberal government in 2019, was applied in provinces that didn't have their own carbon pricing.

 It had two parts: 

That boosted the sticker price of carbon emitting fuels, which was intended to curb their use. "When something costs more people use less of it … we find ways to be more efficient or adopt alternatives," said Stewart Elgie, a professor of law and economics at the University of Ottawa.

Those alternatives could include such things as getting an electric car, taking transit or cycling more, insulating your home or replacing your furnace with a heat pump.

The climate rebate allowed the government to increase price of fuel without impacting people's costs overall. But it also added to the incentive to reduce emissions, since people received payment even if they weren't buying fossil fuels.

"The more you reduced, the more you came out ahead in the pocketbook," Elgie said. "Those who reduced the most actually made money in the end."

Yes, according to a 2024 report from the Canadian Climate Institute. It found that carbon pricing, both consumer and industrial, would play a "leading role" in cutting emissions by 2030. 

However, the industrial carbon price was projected to have three times the impact of the consumer carbon price. The consumer carbon price, or fuel charge, was expected to cut emissions by eight to 14 per cent, compared to 23 to 48 per cent for the industrial carbon price. 

Dale Beugin, co-author of the Canadian Climate Institute report, said: "In some ways, losing the consumer carbon price just emphasizes the importance of the industrial carbon price — that it's hugely important for delivering on competitiveness as well as emissions reductions."

The Liberals under new leader Mark Carney have promised to maintain the industrial carbon price if elected in the upcoming federal election. However, the Conservatives under Pierre Poilievre have promised to eliminate industrial carbon pricing if elected.

Overall, Canada's emissions are declining despite a growing economy. In 2023, Canada emitted 694 megatonnes of carbon dioxide, down 0.9 per cent compared to 2022 and a decrease of 8.5 per cent compared to 2005, the federal government reported.

"We're finally seeing success in lowering our emissions and building a clean economy after decades of of failure," said Elgie. "And that's because our climate policies are now working."

Not necessarily, according to both Elgie and Beugin.