Scheer vows to scrap clean fuel standard, calls Liberal plan a 'secret fuel tax'

Conservative Leader Andrew Scheer says a government led by him would scrap what he has dubbed a "secret fuel tax" — a plan by the Liberal government to improve fuel standards through regulatory changes that have not yet been finalized.

In addition to the existing carbon tax regime, the Liberal government has said it wants to make the fuel supply (like gas for autos or home heating fuel) cleaner, to reduce carbon emissions and help Canada meet targets set under the Paris climate change accord.

"While you have never had to worry about paying more at the pump, for some families living paycheque to paycheque, an extra $100 a month matters," Scheer said in a letter to Prime Minister Justin Trudeau.

Scheer's letter projects a price increase of 4 cents on a litre of gas due to the costs associated with a cleaner fuel standard. The actual cost of the fuel standard is unknown; it's not set to take effect until 2022. Scheer said Canadians deserve to know now how much the standard will set them back each time they go to the pumps.

"Prime Minister, Canadians are tired of your government's never-ending tax hikes and deserve to know the truth. You promised transparency, but yet again are not as advertised," he said.

While the federal government is still in the midst of a years-long consultation process on what form a national fuel standard will take, Environment Minister Catherine McKenna said late last month the plan will demand that fuel companies produce cleaner products to reduce greenhouse gas emissions by 30 megatonnes a year by 2030.

To hit that target, the government projects the "carbon intensity" of liquid fuels such as gasoline and diesel will need to be 10 to 12 per cent lower than it was in 2016.

According to a government backgrounder, fossil fuel suppliers will be able to meet the performance standard by "taking action themselves" to make fuels cleaner — through improvements to the refining process, for example — or by purchasing credits from low-carbon-intensity fuel producers and other credit generators, such as companies that manufacture electric vehicles and charging stations, or farmers who turn waste products into renewable biofuels.

Scheer said this plan could prove costly for Canadian consumers.

"Your secret fuel tax will undoubtedly increase the cost of gasoline by at least another four cents a litre, a fact you continue to hide. It is also an unprecedented tax that will apply to all fuel sources, including the fuel used for manufacturing and home heating, which will make Canadian businesses less competitive and gas more expensive," Scheer said.

Nova Scotia Liberal MP Sean Fraser, parliamentary secretary to the minister of the environment, said Scheer's rhetoric threatens the country's climate action plan.

"All we hear from Andrew Scheer is how he wants to do less to tackle climate change, when the science says we need to be doing more. Doing less will cost Canadians, who are already feeling the impacts in extreme weather events like floods and fires, and health risks like lyme disease and asthma," Fraser said.

Fraser said the new fuel standard will reduce emissions dramatically — by roughly the equivalent of taking seven million cars off the road every year.

"This is an important part of our plan that was made with Canadians, for Canadians," Fraser said.

The fuel standard was first promised three years ago — consultation work begin in January 2017 — but a final draft of the regulations isn't expected until 2020, after the next federal election.

The Canadian Association of Petroleum Producers (CAPP), the group that represents the oil and gas sector, recommended in its 2019 election platform that all parties "withdraw the proposed clean fuel standard in its entirety, as it will increase costs to both industry and Canadians."

Last month Scheer unveiled a climate plan of his own, promising "green technology, not taxes" to ensure Canada reaches its Paris targets. Canada has committed to lowering emissions by some 30 per cent from 2005 levels by 2030.

Scheer left a clean fuel standard out of his plan but promised to "work with provinces, territories and stakeholders to increase the availability and use of renewable fuels and to decrease the carbon intensity of Canada's fuel mix" — without explaining how a Conservative government would accomplish that task.

The Conservative plan hinges on setting strict emissions standards for major greenhouse gas emitters that, if exceeded, would force those companies to pay into a fund that would in turn be invested in government-certified clean tech companies — a policy the party said would force companies to make emissions reduction part of their business models.

The plan includes a host of other environmental measures — including home retrofit tax credits — meant to reduce the country's carbon footprint. It does not, however, include any hard data on how much it actually would reduce Canada's emissions.