Canadian PM announces federal system for price on carbon pollution to be in place in 2019

Canadian Prime Minister Justin Trudeau announced Oct. 23 that there will be a federal system in place in Ontario, New Brunswick, Manitoba and Saskatchewan in 2019 to put a price on carbon pollution.

The federal carbon pollution pricing system has two components: a fuel charge and an output-based pricing system for emissions-intensive trade-exposed industries. This pricing system will take effect Jan. 1, 2019, and the fuel charge will take effect in April 2019. In Nunavut and Yukon, both components will come into effect no later than July 1, 2019, at the same time as Northwest Territories’ price on carbon pollution.

Exemptions will include diesel-fired electricity generation in remote communities and aviation fuel in the territories. Additionally, farmers and fishers are exempt from the fuel charge related to eligible fishing and farming activities. Eligible commercial greenhouse operators will receive partial relief from the fuel charge.

According to a news statement on the prime minister’s website, “Canadians are seeing the costs of climate change first hand …. We need to act now to fight back against climate change, for our children and grandchildren. The Government of Canada has a plan that protects the environment while growing the economy, and that plan is working …. But we know we need to do more.”

The statement says a price on carbon pollution gives people the incentive to make cleaner choices and gives businesses incentives to find clean solutions. Alberta, British Columbia, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Quebec and Yukon “have stepped up and shown leadership, either by developing their own systems or choosing to adopt the federal pollution pricing system.”

In fact, the three provinces that already have carbon pollution pricing systems – British Columbia, Alberta and Quebec – were among the top performers in gross domestic product growth across Canada in 2017.

In Ontario, New Brunswick, Manitoba and Saskatchewan, any direct proceeds collected under the new federal system will go directly back to the people in these provinces. Households will receive a Climate Action Incentive, and funds also will be given to cities, school, hospitals, businesses and indigenous communities to help them become more energy efficient and reduce emissions.