Prime minister pauses carbon tax on home heating oil for three years

Posted: October 26, 2023 9:42 pm
By Ben Cleary

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Prime Minister Justin Trudeau announced changes to the carbon tax in Atlantic Canada on Thursday, a day before Conservative leader Pierre Poilievre is set to hold a rally in St. John’s.

Trudeau announced the government is moving ahead with doubling the pollution price rebate (Climate Action Incentive Payment) rural top-up rate, increasing it from 10 to 20 per cent of the baseline amount starting in April 2024.

He also announced that the government is moving ahead with a temporary, three-year pause to the federal price on pollution (fuel charge) on deliveries of heating oil in all jurisdictions where the federal fuel charge is in effect. This pause would begin 14 days from today. While the fuel charge is already returned to consumers through the pollution price rebate, this temporary pause would save a household that uses heating oil $250 at the current rate, on average, while the federal government works with provinces to roll out heat pumps and phase out oil for heating over the longer term.

Additionally, the federal government will work with provinces and territories to help people save money over the longer term by making it easier to switch to an electric heat pump to heat their homes. The Prime Minister announced the following new measures that will be piloted first in Atlantic Canada:

  • An upfront payment of $250 for low- to median-income households, which will be available to those who heat their homes with oil and sign up for a heat pump through a joint federal-provincial government program.
  • A strengthened Oil to Heat Pump Affordability program that will partner with provinces and territories to increase from $10,000 to $15,000 the amount of federal funding eligible homeowners can receive for installing a heat pump, adding up to an additional $5,000 in grant funding to match provincial and territorial contributions via co-delivery arrangements. This would make the average heat pump free for lower income households as we continue to minimize upfront costs and make federal programs even easier to access for all households.

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