If you have followed federal politics in Canada over the past decade, you likely know that the official Conservative Opposition consistently called on the Liberal government to remove the federal carbon tax. Our argument has always been that carbon taxes unfairly increase costs for Canadians, whether heating their homes or driving to school, work, medical appointments, or other essential activities.

Throughout those years, Liberal ministers and their supporters repeatedly insisted that we were wrong. They maintained that the carbon tax had no significant impact on affordability or inflation. That position held until the last election, when the Liberals themselves chose to eliminate the federal consumer carbon tax.

Since then, Liberal MPs, cabinet ministers, and even the Prime Minister have regularly pointed to the removal of the consumer carbon tax as a measure that is helping improve affordability for Canadians. It is worth noting the dramatic shift in tone: from dismissing concerns about affordability impacts to now presenting the tax’s elimination as a key affordability measure.

The reason I raise this is because, while the Liberals ended the consumer carbon tax, they did not eliminate the industrial carbon tax. This distinction matters, particularly in the context of rising grocery prices. Canadians have seen food costs increase sharply, to the point where food inflation in Canada is now the highest in the G7 and roughly double that of the United States. Many families feel this every time they go to the checkout.

In response to growing affordability pressures, the Liberal government recently announced a temporary increase to the GST credit- a policy lifted from the Trudeau Government era, rebranded it as the Canada Groceries and Essentials Benefit. While the Conservative Opposition supports helping lower‑income Canadians, the measure only applies to those who already qualify for the GST credit. It also does nothing to reduce the actual price of groceries. Furthermore, the Parliamentary Budget Officer estimates that this initiative will cost $12.4 billion between 2025‑26 and 2030‑31, and the government has not yet explained how this new expenditure will be funded.

Although many different forces contribute to rising grocery prices, some factors fall directly under federal control. One of those is the industrial carbon tax. In Canada, both urea and anhydrous ammonia—essential components in fertilizer—are produced using natural gas. Because natural gas is subject to the industrial carbon tax, this increases the cost of fertilizer and, in turn, raises expenses for Canadian farmers. These increased production costs ultimately work their way into the food supply chain and onto the shelves of Canadian grocery stores.

There is also a competitive issue. Farm products imported into Canada from countries without an industrial carbon tax do not face these higher input costs. That gives foreign producers an advantage over Canadian farmers. And when Canadian farmers look for ways to stay competitive by purchasing fertilizer from countries without such taxes, it undermines the domestic fertilizer industry without delivering any environmental benefit.

Despite these realities, the Liberals continue to deny that the industrial carbon tax contributes to rising food costs. This stance resembles their earlier insistence that the consumer carbon tax had no impact on affordability—before they reversed course and began claiming that removing it is helping Canadians.

All of this raises a straightforward question: Given that the Liberals have already abandoned the consumer carbon tax in the name of affordability, is it time for them to also reconsider the industrial carbon tax?

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