Trudeau government announces new name for carbon tax rebate

The federal government has given the carbon tax rebate a new name.

From now on, officials in Ottawa will refer to the Climate Action Incentive Payment as the “Canada Carbon Rebate.”

The federal carbon price will be hiked to 17.6 cents per litre of gas and 15.25 cents per cubic metre of natural gas on April Fools' Day – but rebates will also be increased. BC's carbon tax regime will change with the federal government's.

The carbon tax policy has proved unpopular in recent months, with a poll in November last year finding that most Canadians want it to be abolished or reduced.

Conservative Party Leader Pierre Poilievre has put his “axe the tax” catchphrase at the centre of his bid to become Canada’s next prime minister.

The policy came under particular scrutiny late last year when Prime Minister Justin Trudeau announced a carbon tax carve-out for home heating oil.

Announcing the name change today, Environment Minister Stephen Guilbeault said the rebate scheme “is helping Canadians, and Canadians who need it the most.”

He added: “Granted, the previous name was difficult to understand, and even for many people to remember, and this will likely make it easier.”

Guilbeault also said the Bank of Canada’s governor has made it clear that the carbon tax “is not contributing to inflation,” adding that he meant not more than one percentage point of inflation.

Last year, the Bank’s governor, Tiff Macklem, said eliminating the levy would cause a one-time drop in inflation of 0.6 percentage points.

That would have brought Canada’s then-inflation rate of 3.8 per cent down to 3.2 per cent – a 15.8 per cent decline.

The environment minister also admitted his government’s carbon policy had been communicated poorly.

But he said US senators had told him they envy Canada because the country has a carbon tax.

“Many US legislators would like to do carbon pricing,” he said.