‘Backstop’ legislation will impose carbon pricing across Canada
On May 18, 2017, the federal government announced plans to introduce new legislation 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.
The backstop will also supplement (or "top-up") systems that do not fully meet the benchmark.
The federal carbon pollution pricing backstop will be composed of two key elements:
1) a carbon levy applied to fossil fuels; and
2) an output-based pricing system for industrial facilities that emit above a certain threshold.
The output-based pricing system will apply to all industrial facilities that emit 50 kilotonnes (kt) or more of CO2e per year. It will not apply to facilities in specifically listed sectors such as buildings (including municipal, hospitals, universities, schools, commercial), waste and wastewater, regardless of the quantity of their emissions.
The output-based pricing system will apply to emissions of all seven of the UNFCCC greenhouse gases – CO2, CH4, N2O, hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6) and nitrogen trifluoride (NF3) – that can be quantified using robust and replicable quantification methodologies. The output-based pricing system will also apply to other GHG emissions such as process emissions and emissions from solvent use.
All provinces and territories but two signed on to the Pan-Canadian Framework on Clean Growth and Climate Change in December 2016. The backstop will apply only to a province or territory that does not have a pricing system that aligns with the benchmark. The carbon levy will come into effect in 2018.
For more information, see Technical Paper on the Federal Carbon Price Backstop at: