The former Bank of Canada governor formed a leaner cabinet of 24 members, down from 37, excluding some high-profile MPs
An order-in-council to eliminate the consumer carbon tax, that was signed by Prime Minister Mark Carney on Friday, March 14, 2025. Photo by Justin Tang/The Canadian Press
OTTAWA — With the swipe of a sharpie, Prime Minister Mark Carney reduced the price of the consumer carbon tax rate to zero, meaning Canadians will no longer be paying it on fuels. In doing so, he also neutralized one of the Liberals’ most unpopular policies before a widely expected election call.
Carney invited cameras into the cabinet room on Parliament Hill Friday afternoon to watch him sign a document zeroing out the tax rate.
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The gesture marked a stark departure from how Canadian leaders have typically done business in the past and was reminiscent of a scene Canadians are most used to seeing south of the border, as U.S. President Donald Trump routinely invites media into the Oval Office to watch him sign executive orders.
But sitting around a boardroom is the kind of setting Carney is used to, given his private sector business experience and time spent as a central bank governor in both Canada and England.
So as cabinet ministers looked on, Carney delivered some brief statements before opening a red folder placed in front of him.
“We have already taken a big decision as this cabinet because this is a cabinet that’s focused on action, it’s focused on getting more money in the pockets of Canadians, it’s focused on building this economy,” he said as he sat at the cabinet table.
“Based on the discussion we’ve had and consistent with a promise that I made and others supported during the (Liberal) leadership campaign, we will be eliminating the Canada fuel charge, the consumer fuel charge, immediately.”
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Canadians on track to receive a carbon-tax rebate due to be sent out next month should still expect to receive one, Carney said, which means cheques could be arriving in the midst of an election campaign, which Carney is widely expected to call within the next two weeks.
“This will make a difference to hard pressed Canadians, but it part of a much bigger set of measures that this government is taking to ensure that we fight against climate change, that our companies are competitive and the country moves forward,” Carney said.
Technically speaking, Carney eliminated the consumer carbon tax through regulation, scaling back the price to zero, explained Steven Guilbeault, the outgoing environment minister and anti-oil activist who was shuffled to the heritage ministry on Friday.
Carney signalled his plan to eliminate the tax after being sworn in as Canada’s 24th prime minister earlier Friday.
Making good on his pledge dealt a blow to the Opposition Conservative Leader Pierre Poilievre, who has spent the past two years crisscrossing the country campaigning on a pledge to “axe the tax” blaming it for the higher costs of food and fuel Canadians were paying.
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Thousands of Conservative supporters and other Canadians packed convention halls to rally around that promise, which he told right-wing author and commentator Jordan Peterson back in January had become “iconic.”
In recent weeks, however, Poilievre has been forced to shift his message away from calling for a “carbon tax election” in light of Canadians growing increasingly concerned about U.S. President Donald Trump and his trade war with Canada, as well as constant comments around annexation.
Carney is pitching himself to Canadians as the leader with the most economic and management experience needed to take on Trump.
He has said he is open to seeking that mandate instead of returning to Parliament, which is set to resume on March 24.
Under former prime minister Justin Trudeau — who officially resigned on Friday — the Liberals had dismissed Poilievre’s criticisms as exaggerated and exploiting Canadians anxieties around the cost of living, which skyrocketed as inflation rose coming out of the COVID-19 pandemic.
With members of his cabinet behind him, Prime Minister Mark Carney speaks to reporters after being sworn in at Rideau Hall in Ottawa, on March 14, 2025 Photo by Minas Panagiotakis/Getty Images
Liberal MP Kody Blois, whom Carney promoted to cabinet and named as his agriculture minister, told reporters that although Canadians received quarterly rebates, the escalating tax had become “a very divisive policy.”
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Part of that is thanks to Poilievre, he said.
“This government has made its decision,” Blois says. “We’re moving forward. There’s other ways that we can continue to fight on climate change. I think it’s the right decision.”
As a Liberal MP from Atlantic Canada, Blois was one of the voices Trudeau heard raise concerns from residents about the cost of the consumer carbon tax, which had risen from $20 per tonne in 2019 to $80 in 2024.
In 2023, Trudeau attempted to address some of those complaints by announcing a carveout for households that use home heating oil, which is the case for many homes across Atlantic Canada.
“Good riddance to the worst tax ever,” wrote Ontario Premier Doug Ford on X on Friday after Carney’s announcement.
As the leadership race to replace Trudeau began, it was evident that the policy was all but doomed.
Positioning himself as a political outsider, Carney promised to scrap the consumer carbon tax Canadians pay on fuels such as gasoline and heating fuels, saying it had become too “divisive.” Transport Minister Chrystia Freeland, who finished a distant second to Carney, vowed the same.
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Carney has promised to instead force industrial emitters to pay more and establish incentives to help Canadians reduce their own emissions.
Before Carney signed Friday’s order, Poilievre panned the new prime minister’s gesture, saying the legislation the Liberals introduced the carbon tax still remained on the books.
“Until Parliament is recalled this carbon tax law will be the law of the land.”
Poilievre said Carney’s promise was nothing more than an attempt to “hide” the policy from voters on the eve of an election call Carney publicly endorsed carbon taxes before entering politics.
“The reality is that Mr. Carney loves carbon taxes and if you elect him you will pay a brutal price.”
The Liberals introduced the Greenhouse Gas Pollution Pricing Act as a signature policy of Trudeau’s climate agenda during his first term in government.
The Supreme Court of Canada upheld its constitutionality in 2021 after it was challenged by provinces like Saskatchewan and Alberta.
Many economists supported the measure as the most efficient way to reduce carbon emissions. Critics, including advocates for climate change and outside policy-makers, said the Liberals failed to properly explain the idea behind carbon pricing and strayed from its purpose with carveouts and by layering on additional emissions restrictions.
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