Trudeau defends decision to pause carbon tax on home heating oil

Taxes are top of mind for federal and provincial governments, as Canadians look to make ends meet, amid higher costs for just about everything.

On Tuesday, the province announced it would extend the 5.7 cent a litre gas tax cut to June of next year.

Meanwhile, the federal government is defending its decision to pause carbon tax on home heating oil.

There was heated debate over the cost of heating homes in Ottawa on Tuesday, with Prime Minister Justin Trudeau defending his carbon tax to help deal with the high cost of climate change.

If you still use heating oil to keep your home warm, the news is good. Home heating oil will be exempt from the carbon tax for three years, as the federal government tries to find ways to help people switch to electric heat pumps.

It’s hoped the tax savings would help pay for the change to people’s heating systems. But Ontario Premier Doug Ford is calling on the government to do more and scrap the entire carbon tax.

“The fact is, the vast majority, 95 per cent of people in Ontario, do not heat their homes or businesses with oil. It’s completely unfair that they still have to pay the carbon tax so I am urging the prime minister to play fair, do what’s right and eliminate the tax altogether,” Ford said.

Ford challenged Trudeau earlier today, when he was in his home town of Etobicoke to announce a six month extension to the 5.7 cent per litre gas tax cut.

“We’re extending the gas tax cut through to June 30, 2024,” Ford said at a press conference.

READ MORE: Government of Ontario extends gas tax cut to next summer

Ford says this is expected to save the average household $260 per year filling up their tank. He says he also wants home heating costs to go down.

“We have to cut, not increase, that awful awful carbon tax. Once again, I am calling on the government to eliminate the carbon tax,” Ford said.

The carbon tax is designed to deal with the impacts and costs of climate change.

Since 2019, the federal government has put a price on carbon pollution, a move they say is applauded by experts around the world.

“After the summer we’ve had, they continue to say no plan against climate change is what’s good for Canadians, good for our economy. They are wrong and Canadians are going to show them that they are wrong,” Trudeau said.

The other question is whether or not the carbon tax is also fuelling inflation.

Conservatives say it contributes as much as 16 per cent to inflation, while the Bank of Canada says the carbon tax is responsible for some inflation.