OPINION: Legault must abolish Quebec carbon tax

Submitted by Nicolas Gagnon, Quebec director, Canadian Taxpayers Federation

If the current trend continues, Quebec will soon be the only Canadian jurisdiction with a carbon tax.

Last week, Prime Minister Mark Carney announced the end of the federal consumer carbon tax. As of April 1, his government will reduce it to zero. That move will lower gasoline taxes by 17.6 cents per litre across the country. 

From coast to coast, drivers will see their fuel bills drop by several hundred dollars a year.

Except in Quebec.

Unlike other provinces, Quebec is clinging to its cap-and-trade carbon tax at all costs. This stubbornness unfairly penalizes Quebecers and Premier François Legault’s silence is becoming deafening. 

Even British Columbia, the pioneer of carbon taxation in Canada, is preparing to scrap it. If NDP Premier David Eby is taking action to protect his taxpayers, Legault has no excuse.

Many Quebecers believe they don’t pay a carbon tax, but that’s simply not true. Unlike other provinces where the tax is visible, the Quebec government hides it within the cap-and-trade system it shares with California, officially called the “cap-and-trade emissions trading system” (SPEDE).

This system, imposed in 2013, forces companies that exceed a certain emissions threshold to purchase carbon credits, which they can then trade in a regulated market. In theory, this is meant to encourage companies to cut emissions. In practice, these costs are largely passed on to consumers.

In real terms, this adds about 10 cents per litre to the price of gasoline and 12.8 cents to the cost of a litre of diesel. This increases transportation costs and hurts Quebecers’ purchasing power. For a family driving a minivan, this means paying around $8 more per tank and nearly $400 per year.

A trucker filling up a big rig with diesel will pay about $128 in carbon taxes to fill up the tanks. Trucks deliver nearly everything we eat and use, so Quebec’s carbon tax is a tax on everything.

This hidden tax allowed the government to take $1.5 billion from taxpayers’ pockets in 2024 alone. Since its inception 12 years ago, it has quietly siphoned $9.5 billion from Quebecers –  without them even realizing it.

Businesses are also feeling the impact.

With productivity already lagging behind the Canadian average and a heavy tax burden weighing them down, Quebec companies can’t afford to pay a carbon tax – especially when all neighboring jurisdictions are dropping theirs.

Companies may relocate, leaving Quebecers unemployed. This risk already existed when Ontario was part of the cap-and-trade carbon tax system with Quebec. It will be even greater now that Quebec stands alone in Canada.

If Quebec insists on maintaining its cap-and-trade carbon tax while the rest of the country abandons carbon taxes, taxpayers will be forced to pay the price of isolationism.

At this stage, the Legault government cannot afford to widen the gap with the rest of the country.
Harmonization with the federal tax framework was used as justification for increasing the capital gains tax. Why not apply the same logic here?

Scrapping this tax wouldn’t just benefit drivers. Every fuel price increase affects the cost of goods and services across the board.

Families receive no financial rebate to offset what they pay. This isn’t a revenue-neutral tax – it’s a government cash grab.

With a fragile economy and weaker competitiveness than the rest of the country, Quebec has a choice to make. Legault must defend Quebecers’ purchasing power instead of clinging to an ineffective tax.

Leaving Quebec isolated with a tax no one else is paying means condemning our workers and businesses to a permanent disadvantage.

The status quo is no longer an option.