Exempting home heating oil from carbon pricing introduces uncertainty and will make the transition to clean energy more expensive

Dale Beugin comments on the Prime Minister’s announcement.

In response to the federal government’s energy affordability announcement today, Dale Beugin, Executive Vice President of the Canadian Climate Institute, made the following statement: 

“The federal government’s decision to temporarily exempt home heating oil from carbon pricing introduces uncertainty to Canadian climate change policy. It sends the signal to emitters—and investors—that policy can be weakened in the future, diluting the carbon price’s effectiveness in driving the long-term, low-carbon investments required to reduce emissions.

“As many families struggle to make ends meet, keeping energy affordable is essential. The steps the government is taking to help more households switch from costly heating oil to cleaner and lower-cost heat pumps will tangibly reduce the cost of living for many families. That’s a good thing. Offering additional rebates to rural households will also help reduce expenses and encourage more people to switch to lower-cost clean energy solutions. However, those measures could and should have been complements to a broad and robust carbon pricing policy, rather than substitutes. 

“In the long run, shifting from oil heating to heat pumps will help fight climate change and save Canadians money. A broad, stable, and predictable carbon pricing system is the most cost-effective way to drive those changes. Diluting it will ultimately make the transition to cleaner energy more expensive.”


Blog: “Carbon pricing exemptions are the wrong way to keep energy affordable,” 17 October 2023.

Report: Clean electricity, affordable energy, June 2023

Report: The State of Carbon Pricing in Canada, June 2021.