The Carbon Tax: is It Fair for Canadians?

by | November 2023

If paying a higher electricity or gas bill (among other things) has been worrying you lately, you’re not alone.

“Affordability clearly dominates as the concern most on the minds of Canadians at present,” says a recently published Canadian Economic Confidence Fall 2023 report from Leger.

We know engaged women are being pushed beyond their financial capacity, and as a result they are making many financial decisions to keep their daily essentials within their means.

In addition to challenges such as inflation and rising prices, one issue at the top of the list of concerns in the Leger report is: taxes.

When it comes to energy prices, the carbon tax is an especially hot topic right now as is the rising cost of energy. In fact, it’s been all over the news and it made national headlines.

Why is the carbon tax sparking controversy?

The carbon tax impact can be felt in our monthly expenses, from filling up a gas tank or heating the house throughout the long, cold winter.

The amount of tax that is levied depends either a) on how much fuel you use or b) how much carbon dioxide the fuel releases when burned —  for example, coal releases more carbon dioxide than natural gas, so the tax on it is higher.

Many question why the tax is not applied equally across the country.

For example, not every province has been paying the federal carbon tax since legislation introduced it in 2019 — Atlantic Canada only started paying it in July of 2023.

And as you likely saw in news coverage recently, the federal government paused the carbon tax on home heating oil for three years. This disproportionately benefits people in Atlantic Canada as 40% of homes are heated with oil. It also leaves the rest of Canada with a higher tax burden comparatively.

Over the last week, provincial premiers have been united in their criticism of a tax reprieve for some Canadians and not others, saying the tax break is being unfairly applied across the country. At the federal level there was even a motion put forward to extend the carbon tax pause on home heating oil to all forms of home heating. It was shot down.

Now, if you’re wondering about the rebates associated with the tax, there’s a fairness issue there too.

“Those who use less fuel pay less tax, but still get the same rebate as someone who burns a lot of fuel — leaving them financially ahead by comparison,” reports the CBC.

Another point critics make is that it places a higher burden on some industries more than others. For instance, energy, agriculture, transportation, and metal and cement manufacturing, bear a high burden of the carbon tax because they use energy to operate. This affects our competitiveness, jobs, and Canada’s economic prosperity as a whole.

Finally, many say the carbon tax (also referred to as the “price on pollution tax”) does not always result in people being able to actually make greener choices as there are realities affecting their ability to do so. For example, it’s difficult not to drive your car if you live in a rural area where there is no public transportation. This can lead to resentment as people perceive it to be a punitive measure, rather than offering them positive incentives to adopt more sustainable practices which may not be practical.

For those already tackling their personal carbon footprint (by say, using energy-efficient appliances or taking more public transport), the tax can feel like an additional financial burden and lack of acknowledgement of their effort.

While the carbon tax might seem like a political issue, at its core it’s an affordability problem. And it’s one that many engaged women think is affecting their standard of living and unfairly impacting some Canadians more than others.

This dilemma is bigger than the environment, because it’s causing real economic and social distress.

Are there better solutions for meeting our environmental goals without affecting our national prosperity? Let us know what you think by sharing this article with your thoughts on LinkedIn, Facebook, Instagram, or X (formerly Twitter).