The carbon tax for consumers is gone — for now. But should industry keep paying it?

The consumer carbon tax's demise has made its mark on gas prices across Newfoundland and Labrador, but that doesn't mean carbon pricing will disappear entirely.

The price at the pumps plummeted overnight Tuesday by over 20 cents a litre as Liberal Leader Mark Carney's new order came into effect, removing the 2019 surcharge implemented by former prime minister Justin Trudeau as an incentive for Canadian consumers to move to renewable energy.

But Dan McTeague, president of Canadians for Affordable Energy, says it's only a temporary reduction.

"I don't think it's gone forever," McTeague said in an interview Tuesday. "The Mark Carney government has made it very clear that they are going to somehow transition this to an industrial carbon tax."

McTeague says because the Greenhouse Gas Pricing Pollution Act remains in place, the cost of gas at the pumps will start to climb upward once again, because oil and gas refiners are still paying a separate carbon tax. 

"It will be hidden…. Sooner or later we're going to see some of these prices restored," he said. "All this was a suspension."

McTeague has long railed against carbon pricing, in part because he says there's a better way to encourage less carbon consumption. 

"The technology has changed dramatically in terms of fuel consumption. So rather than going after consumers and saying, 'Hey, listen, you should be the ones to pay for this,' and then hope that there's some kind of technology that makes engines more efficient … the way to go about this is to incentivize the changes that we're seeing gradually," he said.

McTeague says Newfoundland and Labrador in particular can leverage its offshore oil income to invest in those technological improvements, and shouldn't be penalized for doing so. One renewable energy investment, he suggests, could take the form of small nuclear reactors — paid for through oil investment returns.

"It kind of makes me sad to know that we have as much energy as, say, Norway, and yet we're not taking advantage of it," he said.

Environmental advocates, though, say keeping the industrial carbon tax intact will do more good than harm in the long run.

"We need to look at the cost-benefit ratio," said Conor Curtis, spokesperson for Sierra Club Canada.

"I don't think anybody would argue that seatbelts in cars cost companies money, right? But all the benefits outweigh the costs." 

Curtis has research to back up his take: a 2024 report from the Canadian Climate Institute found that industrial carbon taxes will cut emissions by 23 to 48 per cent by 2030.

"One of the major drivers of us not meeting climate targets, us having a problem with pollution, it really is a corporate issue," Curtis said.

"Particularly oil and gas companies, which account for around 30 per cent of our national emissions despite being five per cent of our economy, have been one of the major obstacles in terms of lowering those emissions."

Curtis says the industrial tax is expected to spur green innovation — and could have the added boost of tying Canadian policy more closely with European goals. 

"As we try to diversify trading partners too, looking to Europe ... these are countries that are decarbonizing. So then it becomes also a question of, how do we keep our businesses competitive in a green way, with greener businesses?"

As U.S. trading partners continue to forge alternative relationships amid the new administration's combative economic strategy, Curtis says retaining the industrial tax could be key, both in terms of reducing emissions and generating domestic income.

"Oil and gas are poor things to base your economy upon. If you're dealing with international unpredictability, when you get these rapid international price shocks to those products ... there's not much you can do about that," he said.

"One of the most important things we can do, actually, is diversify our economy, go green, because then we're helping to insulate ourselves from what the U.S. does."

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