The federal government is setting out to rebrand its carbon tax rebate and minimize if not reverse a “profound” political liability, as polling shines a light on poor communication that undercut the policy’s popularity leading into the next federal election.
“The price on pollution or carbon tax, while not overwhelmingly unpopular, faces enough opposition to influence election outcomes significantly,” writes Abacus Data founder David Coletto, based on a survey conducted in January.
The poll found a significant gap in awareness among Canadians eligible for Ottawa’s Climate Action Incentive Payment (CAIP). Only about half of those recipients are aware they received a payment, and not all of them associate it with the carbon tax. A large group—41%—believes the rebate does not compensate most people for the pollution prices they pay in their energy bills, Some 43% doubt the policy’s value in reducing emissions, and 47% blame the carbon tax for energy price increases.
“These perceptions are not just knowledge gaps,” Coletto writes. “They are potent narratives that have taken root in the public consciousness, likely fueled by the political debate and what I believe is insufficient government communication.”
“The political ramifications of these perceptions are profound,” he adds. “One in four Canadians, including a notable 10% of past Liberal voters, cite the carbon tax as a reason for withdrawing their support from the Liberals.”
Carbon pricing has been a contentious issue since its inception in the 2018 Greenhouse Gas Pollution Pricing Act. Since then, it has been the focus of legal challenges and political pushback, and has been a foreground talking point in Conservative Party leader Pierre Poilievre’s strategy to build support ahead of the next election. His “axe the tax” rallying cry, in particular, has sought to frame the carbon tax—inaccurately—as a major driver of inflation.
The system has two major components. The first is a charge applied to most fuels that consumers use, with some specific exemptions like home heating oil. The charge is paid by the fuel distributor, then passed along to consumers. Complementing the fuel charge, the second component—the Output-Based Pricing System—charges industrial users with bigger carbon footprints for a portion of the emissions they produce. (That system has taken frequent criticism for undercharging big emitters.)
Crucially, the fuel charge includes a mechanism that makes it revenue-neutral by paying out a rebate to eligible residents. The net result is that 80% of Canadians actually receive more back in rebates than they spend on the fuel charge—and the less fuel they use, the more money they keep in their pockets.
But lack of awareness about that rebate—the CAIP—is the most acute point of misunderstanding, highlighting “a major communication challenge for the federal government and advocates of carbon pricing,” Coletto writes.
He says the miscommunication may partly be a result of Ottawa’s 2016 rules to limit government communications, which were intended to curb self-serving and partisan advertising. The same government that brought in those rules is now setting out to rebrand the carbon tax, but misconceptions about the CAIP have created fertile ground for political opponents to erode their popularity.
But so far, the widespread misunderstanding and mistrust of one of the government’s flagship policies is “a failure at the most basic level of retail political communication,” said Shachi Kurl, president of the Angus Reid Institute, which conducted a similar survey in November.
Well aware of its poor perception among voters, the Trudeau government is trying to rebrand the CAIP by changing its name to Canada Carbon Rebate. The federal government is also working with financial institutions to ensure that direct deposits appear on bank statements with a descriptive title. Until now, the rebates have carried nondescript names like “CANADA FED”, “DN CANADA FED/FED”, or “EFT Deposit from CANADA,” none of which suggest anything to do with carbon pricing, CBC News reports.
