Canada may reach 2030 emissions goal without carbon tax

Canada could meet its 2030 emissions target without a carbon tax on consumers, some analysts say, as the Liberal government faces mounting political pressure to remove it.

The tax has long been criticized by the opposition Conservative Party, which has vowed to "axe the tax" if it wins power, but support has recently eroded even among the policy's former backers.

The carbon tax is intended to help Canada cut emissions of climate-warming carbon dioxide by 40%-45% below 2005 levels by 2030. The next election will be held by October 2025 and polls show Prime Minister Justin Trudeau's Liberals will lose badly to the Conservatives.

Even if Ottawa scraps its carbon tax that consumers pay on gasoline and other fuels, Canada could reach the 2030 goal by leaning on other policies, said Mark Zacharias, executive director at think-tank Clean Energy Canada.

The portion of carbon tax that applies to industrial sites such as oil sands mines and cement plants is less contentious than the consumer tax. The industrial tax will play a larger role in cutting emissions, along with a proposed oil-and-gas emissions cap and regulations to reduce methane pollution, Zacharias said.

The tax on consumers will deliver only 8%-9%, or 19 million to 22 million metric tons, of the emissions cuts Canada plans to achieve by 2030, according to the Canadian Climate Institute.

"The consumer carbon tax is a political albatross right now and I don't know if there's going to be any recovery from the damage and misinformation around it," Zacharias said.

The Conservatives blame the carbon tax for contributing to inflation, even though it is designed to be revenue-neutral and around 80% of Canadians receive more in rebates than they pay in tax.

The consumer carbon tax applies to much of Canada's emissions from transportation and buildings, but government rebates for electric-vehicle purchases and building retrofits are also helping trim emissions from those sectors, said Dale Beugin, the climate institute's executive vice president.

Kathryn Harrison, a political science professor at the University of British Columbia, said however that Canada cannot reach its 2030 goal by targeting big industrial polluters alone.

There is risk that the industrial tax, which will account for 39% of emissions cuts by 2030 according to the institute's estimates, will also become a political target, Beugin said.

British Columbia's left-leaning premier David Eby said last week he would scrap the province's carbon tax if Ottawa dropped its legal requirement for one. The same day, federal New Democratic Party Leader Jagmeet Singh said he favored a different approach to addressing climate change when asked if he supported the consumer carbon tax, without giving details.

The Conservatives have not said whether they will maintain the industrial carbon tax if they win power.