Justin Trudeau taxed fossil fuels — and paid the price

Justin Trudeau’s resignation as prime minister of Canada signals the departure of one of the world’s leading climate hawks. From the moment the charismatic young progressive took power a decade ago, he staked his career on aggressive climate action, pushing through a carbon tax, clean energy subsidies, and a slew of regulations loathed by the country’s large oil and gas industry.

The prime minister’s impending exit, announced January 6, comes as his Liberal party heads toward a wipeout in an election that must occur before October. Voters are furious over what they consider Trudeau’s failure to address housing costs and crime; his handling of the pandemic; and his climate action, which many blame for rising energy and gas costs. This popular swing against climate policy parallels a trend seen across the developed world, including Europe and the United States, where President Donald Trump has promised to repeal the Biden administration’s landmark climate law, the Inflation Reduction Act.

Trudeau’s policies went well beyond Biden’s — he passed a federal carbon pricing system and successfully defended it against several challenges, something Democrats in the United States have never been able to do. In the end, his ambitious carbon pricing program contributed to his downfall. Pierre Poilievre, who leads the surging Conservative party, has over the past year launched a campaign to “Axe the Tax,” holding rallies that channeled voter frustration with energy costs and made climate policy a liability for the liberal government.

“It was a national, relatively universal carbon tax on consumers, and people were angry, they were feeling pinched,” said Cherie Metcalf, a law professor at Queen’s University in Ontario and an expert on Canadian climate politics.

The Trudeau government made substantial progress in almost every major area of climate policy. He rolled out clean energy subsidies, stepped up Canada’s overseas aid funding for climate disasters, and enshrined the country’s net zero target into law. But the centerpiece of his legacy is a carbon tax based on a policy adopted in the left-leaning province of British Columbia. The tax, launched in 2019, requires big polluters to purchase emissions credits, much like the major cap-and-trade schemes in Europe and California, but it also imposes a surcharge of a few cents on every gallon of gasoline or heating oil that Canadians use. 

It’s too early to say how the carbon tax has affected Canada’s emissions trajectory, but the government says the provision in British Columbia that inspired it has cut emissions by 15 percent from where they otherwise would be. Federal officials also say the tax will drive more than a third of Canada’s overall emissions reductions by 2030, by which point the government hopes to cut emissions by half from peak levels. 

“Justin Trudeau has accomplished more on climate policy than any other Canadian prime minister so far,” Caroline Brouillette, executive director of the advocacy organization Climate Action Network Canada, said in a statement after his announcement. “The past 10 years have seen a revolution in how we tackle climate change in Canada, moving from a piecemeal and voluntary approach towards one where the government proactively plans… to reduce emissions to reach our climate targets.”

The Liberal leader’s climate record was far from perfect, however, particularly when it came to Canada’s $250 billion oil industry. He waffled for years on the issue of drilling in Alberta’s oil-rich tar sands, for example, at one point suggesting production should be “phased out” and at another saying that “no country would find 173 billion barrels of oil in the ground and just leave them there.” 

Although he imposed stringent regulations on oil producers in the Alberta tar sands and the carbon tax made drilling much more expensive, critics considered his spending $9 billion on carbon capture projects to make that work cleaner an attempt to prop up the industry. In 2018, his government purchased and completed the struggling Trans Mountain pipeline project, boosting Canada’s export capacity over the furious objections of indigenous First Nations groups. Oil and gas production, which comprises an astonishing 31 percent of Canada’s overall emissions (compared to around 4 percent in the United States) is the main obstacle to the country’s full-scale decarbonization.

Beyond his uneven action on fossil fuels, Indigenous leaders say Trudeau has a spotty history with environmental justice, and of addressing Canada’s colonial history of oppression and genocide.

“He took much more progressive action on climate than any other prime minister we’ve ever seen, but he lacked any clear justice element to address historical wrongdoings and the ongoing legacy of colonization,” said Eriel Deranger, an Indigenous climate activist and a member of the Athabasca Chipewyan First Nation. Deranger has fought drilling in Alberta’s tar sands, her nation’s ancestral home, for more than a decade. 

“Canada is a petrostate, and they haven’t figured out their just transition strategy to transition out of that,” she added, noting that oil exports reached an all-time high of 4 million barrels per day in 2023, driven in large part by growth in the tar sands.

His exit comes as left-of-center parties suffer electoral defeats throughout the West. Republicans scored a convincing win in federal elections in the United States, while France and Germany are expected to see conservative governments take power this year. Climate issues have proven effective fodder for right-wing parties in countries like the Netherlands as well.

Disaffected voters in many of these countries have latched on to climate issues: Cloudy weather that blocks solar energy has caused political furor over power prices in Germany, while the Dutch government’s efforts to reduce nitrogen emissions from farming triggered a political war that elevated a nativist far-right party. The Biden administration’s mis-named Inflation Reduction Act was an attempt to meet these concerns head-on, but it failed to persuade voters outraged by rising costs.

Trudeau’s hold on power began slipping last year when polls showed that support for the Liberals had cratered, even in reliable strongholds like Toronto and Vancouver. According to the latest projections from election forecaster 338 Canada, Conservatives are on track to win more than two-thirds of the 343 seats in Parliament, more than doubling their current count. The Liberals, meanwhile, may end up with as few as 25, putting them behind both the progressive New Democratic Party and the Quebec separatist party known as the Bloc Quebecois. 

The election of Donald Trump, who has promised to impose a devastating 25 percent tariff on all Canadian imports, further sank Trudeau’s fortunes. The prime minister flew to Trump’s Mar-a-Lago estate in Florida to meet with the president-elect in November for what he called an “excellent conversation”; Trump later referred to Trudeau as the “governor” of Canada and said he wanted to annex the country. Around the same time, Trudeau announced a nationwide sales tax rebate, prompting a falling-out with his finance minister Chrystia Freedland, another top Liberal politician. Freedland called the tax holiday a “costly political gimmick” that the country couldn’t afford given Trump’s impending tariffs. Dozens of other Liberal representatives soon called on him to resign.

Climate change is not the only issue dragging down Trudeau’s party. A sizable chunk of the electorate still hasn’t forgiven Trudeau for his aggressive response to the pandemic, which included a federal vaccine mandate. Concerns about crime and the cost of housing remain top of mind even in Liberal bastions such as Toronto and Vancouver. Trudeau’s own political brand, and a laundry list of personal scandals, including revelations that he wore blackface on at least three occasions as a young man, have also become wearisome for many voters.

But no issue has proven as effective for Conservatives over the past year as climate change, and in particular the impact of the carbon tax on gasoline and home heating oil. The tax raises the price of gasoline by the equivalent of around 3 cents per gallon, a charge that will continue ratcheting up in coming years. Conservatives tried to elevate the issue in national elections as early as 2019, but it didn’t take hold with voters until costs started to rise in every segment of the economy following the pandemic. That trend allowed the Conservatives to blame Trudeau’s climate policies for voters’ sticker shock, even though around 80 percent of Canadians receive more in tax rebates than they spend on carbon penalties.

“There was actually quite good support for action on climate change at first,” Metcalf told Grist. “The current backlash is really focused more on the consumer side of the carbon tax, given that we’ve been experiencing really high inflation. You also see some of the same aspects that you see in the US or in Europe, you’ve got a populist disenchantment with top-down, directive federal policies.”

As heating and gas prices rose, Poilievre traveled the country holding dozens of rallies where he blamed Trudeau’s climate policy for inflation and high heating prices. In response to public outcry, the federal government in 2023 suspended the carbon tax for home heating oil in several provinces, but that only gave Liberal’s opponents more ammunition. But then last spring, Trudeau raised the tax from around $45 to around $55 per ton of carbon, barely surviving a no-confidence vote forced by Poilievre.

With the Conservatives poised to take power, Metcalf said it’s too early to know how they will handle climate issues. Poilievre has pledged to eliminate the consumer carbon tax, but the fate of the rest of Canada’s climate policy is still up in the air, including Trudeau’s less controversial subsidies for clean energy. As in other countries that faced voter backlash, the success of the right has been more about frustration with past climate action than an alternate vision for how to tackle the emissions problem.

“It remains to be seen what Poilievre will do,” she told Grist. “Except for his slogans about axing the tax, we don’t have a lot of information.”

This story was originally published by Grist with the headline Justin Trudeau taxed fossil fuels — and paid the price on Jan 17, 2025.