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The Pan-Canadian Approach to Pricing Carbon Pollution

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The federal government plans to introduce new legislation and regulations to implement a carbon pollution pricing system – the backstop – to be applied in jurisdictions that do not have carbon pricing systems that align with the benchmark. In its Technical Paper released on May 18, the federal government outlined how the federal carbon tax will be implemented, including how the levy will be applied to fossil fuels, such as gasoline, diesel, and propane, starting in 2018. It also set a levy on emissions from industrial facilities that emit more than 50 kilotonnes or more of greenhouse gases per year (output base), which will start Jan. 2, 2019.

Provinces that already have a carbon tax, such as British Columbia and Alberta, or plan to impose a carbon price through a cap and trade system, such as Ontario, Quebec and Nova Scotia, will not be affected. However, the backstop will supplement (or "top-up") systems that do not fully meet the benchmark. For more information, including details about the output-based pricing system for industrial facilities, view the Technical Paper on the Federal Carbon Pricing Backstop.

NEXT STEPS: The government is accepting comments on its proposal and carbon pricing concept. The CPA will contact members before preparing comments on the proposed model. If you have any feedback or questions, please contact Allan Murphy, Vice-President, Government Relations at allanmurphy@propane.ca.

 

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