People Need a Break on Home Heating

It’s November, and after a warm October in most parts of the country, the weather is starting to feel a bit more seasonal. The cold is clearly on its way, and Canadians are justifiably concerned about the cost of heating their homes after two years of consistent inflationary pressure. There are certainly a number of ways this government can carve out a way for people to save money on their home heating, but it seems like they are taking a scattershot approach that isn’t going to work for most Canadians.

In recent weeks, the government has decided to make some carveouts of their signature carbon tax plan, specifically for home heating oil, for the next three years. In addition, they announced that they would make electric heat pumps free, but only for Atlantic Canadians. They also doubled the rural top-up for Climate Action Incentive Payments, but just for people in rural communities. It’s hard not to be cynical and think that the government is trying to save a few electoral seats and undermining its own climate plan. Canadians are justifiably concerned about climate change. 2023 was a record year for forest fires, with an area burned that was double previous historic records, and hundreds of thousands of Canadians evacuated from their homes. People want to fight the climate crisis, but they need to know that the plan from the government is fair, and creating carbon tax carveouts for some Canadians, but not others, is not the way to go about it.

While New Democrats supported a Conservative motion on eliminating the carbon tax on all sources of home heating, a motion that was not passed by the House of Commons in the end, a far fairer method would be to eliminate the GST on home heating. It’s a simpler proposal that would provide a more rational, stable, and fair method of giving people a break that wouldn’t focus squarely on those who use fossil fuels, but all methods of home heating, including renewable sources like hydro. It’s a much simpler way of giving people a break. This proposal is not new. It was put forward 15 years ago by former NDP Leader Jack Layton. It was a good policy then, and its a good policy now.

Additionally, if we want to reduce carbon emissions while giving people a chance to save money on their home heating, we could expand the narrow carveout on heat pumps the government has provided to the Atlantic provinces to the rest of Canada, making them free and easy to access for low-income and middle-class Canadians, regardless of how they heat their home. This would give people an incentive to make their homes more energy efficient while also saving them money on the back end, reducing their overall carbon footprint. In Ontario, a new heat pump could mean $55 a month in savings on home heating. That’s not a small amount, and it would be accessible by everyone. One of the core issues with the government’s energy retrofit programs has been accessibility. The Greener Homes Program is bureaucratic and inefficient. It has a high cost of entry that is inaccessible to low-income Canadians. Retrofit programs need to be simple to access and cost efficient, otherwise people don’t access them.

To cover those costs, we need to tax the oil and gas companies on excess profits they have made on the backs of Canadians throughout the inflationary crisis. The Parliamentary Budget Officer has previously calculated that a windfall tax on oil and gas companies would bring in over $4 billion. Oil and gas companies are not struggling. In fact, Canada’s five biggest oil and gas companies earned $38.3 billion in combined profits last year – more than doubling their 2021 profits of $16.9 billion.

Through these simple measures, we can reduce the costs of home heating for Canadians, improve the energy efficiency in their homes, and reduce Canadians’ dependance on fossil fuels. It would be fairer, to apply a baseline savings for home heating for everyone, not just those on heating oil, propane, or other fossil fuel heat systems. Canadians need, and deserve, a break.