New Brunswick Liberal leader squeezed on 2 sides over carbon taxes

New Brunswick Liberal Leader Susan Holt finds herself being squeezed from two directions on carbon taxes after her recent call for the federal government to cancel a scheduled increase to the rate. 

The Progressive Conservative government is pushing her to go further and join them in urging Ottawa to abolish the tax altogether.

At the same time, the Green Party says she has fallen for Conservative misinformation and is pandering for votes while ignoring that rebates return most of the money to consumers.

"I think she sees this as a popular position to take," said Green Leader David Coon.

Last Friday Holt joined seven premiers, most of them Conservative, who are asking the Trudeau government to scrap a planned April 1 increase to the tax.

"At a time when so many New Brunswickers are struggling to make ends meet, it's unreasonable to ask them to pay more for a federal carbon tax increase," she wrote.

The tax will increase on April 1 from 14.3 to 17.6 cents per litre of regular unleaded gas.

Holt's statement didn't mention the rebates, which will be $760 for a New Brunswick family of four in the coming year, plus an additional $152 for rural households.

In the legislature Wednesday, Natural Resources and Energy Development Minister Mike Holland said he was encouraged by Holt's statement, even though there was "some concern" she was flip-flopping for political gain.

"We'll give the leader of the opposition the benefit of the doubt, and we can clear this up right here and right now," Holland said, inviting her to co-sign a letter calling for the abolition of the tax.

Holt told reporters she decided to call for a freeze on the carbon tax rate because "we didn't trust that the Higgs government cared enough to do the things they could do to make life more affordable." 

She has called for the government to repeal its legislated "carbon adjustor" mechanism that allows oil companies to pass on the cost of federal clean-fuel regulations to consumers.

That charge is 3.4 cents per litre this week.

The Liberals also want the government to remove the provincial sales tax from electricity bills, something it has so far refused to do.

Holland introduced a non-binding motion in the legislature Wednesday that would call for Ottawa to abolish the tax. MLAs will vote on it at a later date.

Holt pushed back at suggestions she was flip-flopping, saying her position has not changed but acknowledging this is the first year she has called for the cancellation of the annual increase.

The policy is designed to give customers an incentive at the point of purchase to look for alternatives to fossil fuels that warm the climate. It's also intended to make large-scale renewable energy more competitive.

Last year a report by the parliamentary budget officer concluded that 80 per cent of people in the seven provinces then under the federal system would come out ahead thanks to the rebates, with people with lower incomes benefiting the most.

"We estimate that most households will see a net gain, receiving more in rebates from Climate Action Incentive payments than the total amount they pay in the federal fuel charge," the report said.

New Brunswick only joined the federal system later in 2023 so the report didn't analyze the impact here.

Holt said Wednesday she was not persuaded by that report. 

"We've seen different takes on who pays more where, so it's not clear to me how New Brunswickers … are reflected in the work," she said.

She also argued there is a "lag" between when people pay the tax and when they get their rebates. 

"Paying more now to get a rebate three months from now doesn't respond to their reality." 

The last rebate arrived in January and another one is due in April. 

Holt asked Ottawa to "suspend" the increase until 2025 but didn't say what kind of hike — if any — should happen next year. She said it's too early to tell what economic conditions will exist.

The 2023 parliamentary budget officer report also found the carbon tax adds costs to the overall economy, though that conclusion was criticized for not comparing it to the cost of doing nothing about climate change.

Last week federal Conservative Leader Pierre Poilievre warned that if he wins the next election and scraps the federal carbon tax, a future provincial Liberal government could impose its own version.

Holt wouldn't rule that out, calling the question hypothetical. 

The Liberal leader's statement last week promised "a bold made-in-New Brunswick plan that reflects our local reality and opportunities" if she becomes premier.

She said Wednesday that would include a ramping up of the electrification of more vehicles and buildings that would rely on non-emitting nuclear and hydro power from N.B. Power. 

She also said she would encourage the development of more wind, solar and hydrogen power.