Prime Minister designate Mark Carney scrapped the consumer carbon tax Friday afternoon during his first meeting with cabinet ministers. He signed an order-in-council to make the change official, reported the Canadian Press.

Though Carney has long endorsed the carbon tax, he has taken a different stance since launching his Liberal leadership bid. In his first speech as prime minister-designate, he promised to “immediately eliminate the divisive consumer carbon tax on families, farmers, and small and medium-sized businesses.”

That followed vague promises spanning months to reduce the tax burden on Canadians, who will receive one final carbon rebate next month.

The unpopular levy has been a target of Conservative attacks on the Liberals, as well as internal criticism from the Liberal caucus.

Liberal MP Adam van Koeverden, the parliamentary secretary for the environment, acknowledged the policy has become “divisive” and “toxic”.

“It’s just become a huge distraction,” said van Koeverden. “Unfortunately, you know, it sucks up all the oxygen in the room in a conversation. There are other ways we can reduce emissions and fight climate change that aren’t so divisive and toxic.”

The consumer carbon tax is not working. It’s become too divisive — at a time when Canada needs to be united.

As my government’s first order of business, I have cancelled it. pic.twitter.com/en33SBbWFv

— Mark Carney (@MarkJCarney) March 14, 2025

The consumer tax is expected to be replaced with a comparable charge on industrial emitters, which will ultimately be passed on to consumers.

“That’s one of the many reasons I endorsed Mark Carney to be our new leader,” then-environment minister Steven Guilbeault emphasized. “I’ll be happy to continue working with him to ensure we continue advancing in Canada against climate change.”

Guilbeault oversaw the country’s carbon tax system, which included a consumer fuel levy and a separate trading mechanism for large industrial polluters.

The Greenhouse Gas Pollution Pricing Act outlined a planned carbon tax increase every April 1st, at the start of each budget year until 2030. Poilievre centred his attacks on the Liberal government around repealing the law.

Before today’s announcement, the fuel charge on a litre of gasoline would have gone from 17.61 cents now to 20.91 cents. Natural gas (18 cents), diesel and home heating oil (25 cents) would have also faced price hikes.

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