Prime Minister Mark Carney’s government introduced legislation Thursday to formally eliminate Canada’s consumer carbon tax, fulfilling a key campaign promise and marking a dramatic policy reversal on the climate measure that became a political albatross for the previous Liberal administration.
Bill C-4, officially titled the “Making Life More Affordable for Canadians Act,” was given first reading June 5 and would repeal Part 1 of the Greenhouse Gas Pollution Pricing Act and related fuel charge regulations. The move codifies the elimination of the federal fuel charge that was already suspended through regulatory changes in April.
The carbon tax had grown increasingly unpopular among voters, helping drive down Liberal support under Justin Trudeau. Conservative Leader Pierre Poilievre had made “Axe the Tax” a central campaign theme, putting sustained pressure on the governing party. The tax added costs to gasoline, home heating and other consumer goods.
However, the legislation maintains carbon pricing for large industrial emitters, which the government describes as “a pillar of Canada’s plan to build a strong economy and greener future.” The industrial carbon pricing system will continue to apply to major greenhouse gas emitters across various sectors.
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Related: Mark Carney Defends Carbon Tax in Quebec Media Appearance
The bill also includes other affordability measures: cutting the lowest federal income tax bracket from 15% to 14.5% for 2025 and to 14% starting in 2026, establishing a new GST rebate for first-time homebuyers purchasing newly constructed homes, and requiring political parties to strengthen policies for protecting personal information.
Related: Canada’s Carbon Tax Cut Shows Full Impact at Pump One Month Later
The Conservative Party, which had led in polls for much of 2024, has criticized Carney as a continuation of Trudeau-era policies despite the carbon tax elimination. Poilievre has dubbed him “Carbon Tax Carney” and questioned his business ties, though the tax repeal undercuts that particular line of attack.
Environmental groups have criticized the decision to eliminate consumer carbon pricing, arguing it undermines Canada’s climate commitments. The government maintains that industrial carbon pricing will continue to drive emissions reductions in the largest-emitting sectors.
The affordability measures come as Canada’s economy faces multiple pressures, including Trump’s threat of 25% tariffs on Canadian goods and ongoing productivity challenges. Parliament returned from its winter break this week, setting the stage for what promises to be a contentious session as parties position themselves for the expected election campaign.
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