Liberals won't keep promise to immediately repeal carbon adjustor

In the first major reversal of a Liberal election promise, the Holt government will not be repealing the so-called "Higgs carbon adjustor" — one of its signature affordability commitments — by the end of this year.

The Liberals promised during the recent provincial election campaign to "immediately remove" the adjustor, and introduced legislation to do so the day after their speech from the throne in November. 

The adjustor is a mechanism that a 2022 Progressive Conservative bill added to the Energy and Utilities Board's formula for setting the maximum gas price each week.

It requires the EUB to calculate the cost of federal clean fuel regulations to gas producers and pass them on to customers at the pumps.

The Liberals attacked that move as another burden on inflation-weary consumers and labelled it the "Higgs carbon adjustor," vowing in their campaign platform to "immediately" repeal it.

The Liberal bill would take the mechanism out of the EUB price-setting system. They originally said it would be passed by the end of this week, which would make the four-cent charge disappear before the new year.

But late on Tuesday afternoon, the Liberals moved to put off second reading of the legislation and instead send it to the legislature's law amendments committee — a process that allows for public hearings with witnesses, but one that also slows passage of a bill.

Liberal house leader Marco LeBlanc said the government had heard from small gas retailers who worried the cost of the federal regulations would hit their bottom line if it could no longer be passed onto customers.

"Over the past few weeks, this government has taken the time to engage with a wide range of stakeholders, ensuring that every voice — especially those from our small and rural retailers — is heard," he said.

"We met with these entrepreneurs, we listened, and gained valuable insight into the real challenges they face on the ground." 

LeBlanc also thanked the opposition Progressive Conservatives for a "constructive dialogue" that allowed the government to "refine our approach to ensure the legislation is as complete and effective as possible."

Rather than needle the Liberals for breaking their promise on an immediate repeal, PC MLA Kris Austin applauded the move — and took some credit.

"That's how this is supposed to work. That's what happens when you have an effective opposition. I'm proud of our work," he said.

"We showed government that this was the wrong bill to bring forward without proper scrutiny." 

Green Party Leader David Coon wondered aloud whether the Liberals were sending the bill to the committee — which he called the "law amendments graveyard" — as a way of ensuring it's never adopted.

Premier Susan Holt acknowledged last month that it was "absolutely" a concern that repealing the adjustor could lead to small gas stations being hit with the cost of the federal regulations.

"That's why there's work to be done with the EUB and with others, to see how they're going to react to this and what choices they'll make," she said at the time.

Holt also said the government would consider ending the regulation of gas prices altogether, which would free producers and retailers to resume passing the cost on to consumers.

The Liberals haven't introduced legislation to do that.