Regulations Amending Part 1 of Schedule 1 and Schedule 2 to the Greenhouse Gas Pollution Pricing Act: SOR/2019-79
Canada Gazette, Part II, Volume 153, Number 7
Registration
SOR/2019-79 March 26, 2019
GREENHOUSE GAS POLLUTION PRICING ACT
P.C. 2019-218 March 25, 2019
Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 166 of the Greenhouse Gas Pollution Pricing Act footnote a, taking into account, as the primary factor, the stringency of the provincial pricing mechanisms for greenhouse gas emissions, makes the annexed Regulations Amending Part 1 of Schedule 1 and Schedule 2 to the Greenhouse Gas Pollution Pricing Act.
Regulations Amending Part 1 of Schedule 1 and Schedule 2 to the Greenhouse Gas Pollution Pricing Act
Amendments
1 Part 1 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act footnote 1 is amended by adding the following after the heading “Provinces and Areas for the Purposes of Part 1 of the Act”:
Table 1
| Item | Name of Province |
|---|---|
| 1 | Ontario |
| 2 | New Brunswick |
| 3 | Manitoba |
| 4 | Saskatchewan |
2 Table 1 of Part 1 of Schedule 1 to the Act is amended by adding the following in numerical order:
| Item | Name of Province |
|---|---|
| 5 | Yukon |
| 6 | Nunavut |
3 Tables 1 to 5 of Schedule 2 to the Act are replaced with the following:
TABLE 1
| Column 1 Item |
Column 2 Type |
Column 3 Unit |
Column 4 Listed Province |
Column 5 Rate |
|---|---|---|---|---|
| 1 | Aviation gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0498 0.0498 0.0498 0.0498 |
| 2 | Aviation turbo fuel | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0516 0.0516 0.0516 0.0516 |
| 3 | Butane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0356 0.0356 0.0356 0.0356 |
| 4 | Ethane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0204 0.0204 0.0204 0.0204 |
| 5 | Gas liquids | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0333 0.0333 0.0333 0.0333 |
| 6 | Gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0442 0.0442 0.0442 0.0442 |
| 7 | Heavy fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0637 0.0637 0.0637 0.0637 |
| 8 | Kerosene | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0516 0.0516 0.0516 0.0516 |
| 9 | Light fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0537 0.0537 0.0537 0.0537 |
| 10 | Methanol | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0220 0.0220 0.0220 0.0220 |
| 11 | Naphtha | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0451 0.0451 0.0451 0.0451 |
| 12 | Petroleum coke | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0767 0.0767 0.0767 0.0767 |
| 13 | Pentanes plus | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0356 0.0356 0.0356 0.0356 |
| 14 | Propane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0310 0.0310 0.0310 0.0310 |
| 15 | Coke oven gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0140 0.0140 0.0140 0.0140 |
| 16 | Marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0391 0.0391 0.0391 0.0391 |
| 17 | Non-marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0517 0.0517 0.0517 0.0517 |
| 18 | Still gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0540 0.0540 0.0540 0.0540 |
| 19 | Coke | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
63.59 63.59 63.59 63.59 |
| 20 | High heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
45.03 45.03 45.03 45.03 |
| 21 | Low heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
35.45 35.45 35.45 35.45 |
| 22 | Combustible waste | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
39.95 39.95 39.95 39.95 |
TABLE 2
| Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
|---|---|---|---|---|
| 1 | Aviation gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0747 0.0747 0.0747 0.0747 |
| 2 | Aviation turbo fuel | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0775 0.0775 0.0775 0.0775 |
| 3 | Butane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0534 0.0534 0.0534 0.0534 |
| 4 | Ethane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0306 0.0306 0.0306 0.0306 |
| 5 | Gas liquids | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0499 0.0499 0.0499 0.0499 |
| 6 | Gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0663 0.0663 0.0663 0.0663 |
| 7 | Heavy fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0956 0.0956 0.0956 0.0956 |
| 8 | Kerosene | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0775 0.0775 0.0775 0.0775 |
| 9 | Light fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0805 0.0805 0.0805 0.0805 |
| 10 | Methanol | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0329 0.0329 0.0329 0.0329 |
| 11 | Naphtha | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0676 0.0676 0.0676 0.0676 |
| 12 | Petroleum coke | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1151 0.1151 0.1151 0.1151 |
| 13 | Pentanes plus | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0534 0.0534 0.0534 0.0534 |
| 14 | Propane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0464 0.0464 0.0464 0.0464 |
| 15 | Coke oven gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0210 0.0210 0.0210 0.0210 |
| 16 | Marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0587 0.0587 0.0587 0.0587 |
| 17 | Non-marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0776 0.0776 0.0776 0.0776 |
| 18 | Still gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0810 0.0810 0.0810 0.0810 |
| 19 | Coke | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
95.39 95.39 95.39 95.39 |
| 20 | High heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
67.55 67.55 67.55 67.55 |
| 21 | Low heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
53.17 53.17 53.17 53.17 |
| 22 | Combustible waste | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
59.92 59.92 59.92 59.92 |
TABLE 3
| Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
|---|---|---|---|---|
| 1 | Aviation gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0995 0.0995 0.0995 0.0995 |
| 2 | Aviation turbo fuel | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1033 0.1033 0.1033 0.1033 |
| 3 | Butane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0712 0.0712 0.0712 0.0712 |
| 4 | Ethane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0408 0.0408 0.0408 0.0408 |
| 5 | Gas liquids | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0666 0.0666 0.0666 0.0666 |
| 6 | Gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0884 0.0884 0.0884 0.0884 |
| 7 | Heavy fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1275 0.1275 0.1275 0.1275 |
| 8 | Kerosene | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1033 0.1033 0.1033 0.1033 |
| 9 | Light fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1073 0.1073 0.1073 0.1073 |
| 10 | Methanol | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0439 0.0439 0.0439 0.0439 |
| 11 | Naphtha | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0902 0.0902 0.0902 0.0902 |
| 12 | Petroleum coke | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1535 0.1535 0.1535 0.1535 |
| 13 | Pentanes plus | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0712 0.0712 0.0712 0.0712 |
| 14 | Propane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0619 0.0619 0.0619 0.0619 |
| 15 | Coke oven gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0280 0.0280 0.0280 0.0280 |
| 16 | Marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0783 0.0783 0.0783 0.0783 |
| 17 | Non-marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1034 0.1034 0.1034 0.1034 |
| 18 | Still gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1080 0.1080 0.1080 0.1080 |
| 19 | Coke | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
127.19 127.19 127.19 127.19 |
| 20 | High heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
90.07 90.07 90.07 90.07 |
| 21 | Low heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
70.90 70.90 70.90 70.90 |
| 22 | Combustible waste | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
79.89 79.89 79.89 79.89 |
TABLE 4
| Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
|---|---|---|---|---|
| 1 | Aviation gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1244 0.1244 0.1244 0.1244 |
| 2 | Aviation turbo fuel | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1291 0.1291 0.1291 0.1291 |
| 3 | Butane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0890 0.0890 0.0890 0.0890 |
| 4 | Ethane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0509 0.0509 0.0509 0.0509 |
| 5 | Gas liquids | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0832 0.0832 0.0832 0.0832 |
| 6 | Gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1105 0.1105 0.1105 0.1105 |
| 7 | Heavy fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1593 0.1593 0.1593 0.1593 |
| 8 | Kerosene | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1291 0.1291 0.1291 0.1291 |
| 9 | Light fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1341 0.1341 0.1341 0.1341 |
| 10 | Methanol | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0549 0.0549 0.0549 0.0549 |
| 11 | Naphtha | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1127 0.1127 0.1127 0.1127 |
| 12 | Petroleum coke | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1919 0.1919 0.1919 0.1919 |
| 13 | Pentanes plus | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0890 0.0890 0.0890 0.0890 |
| 14 | Propane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0774 0.0774 0.0774 0.0774 |
| 15 | Coke oven gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0350 0.0350 0.0350 0.0350 |
| 16 | Marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.0979 0.0979 0.0979 0.0979 |
| 17 | Non-marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1293 0.1293 0.1293 0.1293 |
| 18 | Still gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
0.1350 0.1350 0.1350 0.1350 |
| 19 | Coke | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
158.99 158.99 158.99 158.99 |
| 20 | High heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
112.58 112.58 112.58 112.58 |
| 21 | Low heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
88.62 88.62 88.62 88.62 |
| 22 | Combustible waste | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan |
99.87 99.87 99.87 99.87 |
4 Tables 1 to 4 of Schedule 2 to the Act are replaced with the following:
TABLE 1
| Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
|---|---|---|---|---|
| 1 | Aviation gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0498 0.0498 0.0498 0.0498 0 0 |
| 2 | Aviation turbo fuel | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0516 0.0516 0.0516 0.0516 0 0 |
| 3 | Butane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0356 0.0356 0.0356 0.0356 0.0356 0.0356 |
| 4 | Ethane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0204 0.0204 0.0204 0.0204 0.0204 0.0204 |
| 5 | Gas liquids | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0333 0.0333 0.0333 0.0333 0.0333 0.0333 |
| 6 | Gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0442 0.0442 0.0442 0.0442 0.0442 0.0442 |
| 7 | Heavy fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0637 0.0637 0.0637 0.0637 0.0637 0.0637 |
| 8 | Kerosene | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0516 0.0516 0.0516 0.0516 0.0516 0.0516 |
| 9 | Light fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0537 0.0537 0.0537 0.0537 0.0537 0.0537 |
| 10 | Methanol | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0220 0.0220 0.0220 0.0220 0.0220 0.0220 |
| 11 | Naphtha | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0451 0.0451 0.0451 0.0451 0.0451 0.0451 |
| 12 | Petroleum coke | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0767 0.0767 0.0767 0.0767 0.0767 0.0767 |
| 13 | Pentanes plus | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0356 0.0356 0.0356 0.0356 0.0356 0.0356 |
| 14 | Propane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0310 0.0310 0.0310 0.0310 0.0310 0.0310 |
| 15 | Coke oven gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0140 0.0140 0.0140 0.0140 0.0140 0.0140 |
| 16 | Marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0391 0.0391 0.0391 0.0391 0.0391 0.0391 |
| 17 | Non-marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0517 0.0517 0.0517 0.0517 0.0517 0.0517 |
| 18 | Still gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0540 0.0540 0.0540 0.0540 0.0540 0.0540 |
| 19 | Coke | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
63.59 63.59 63.59 63.59 63.59 63.59 |
| 20 | High heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
45.03 45.03 45.03 45.03 45.03 45.03 |
| 21 | Low heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
35.45 35.45 35.45 35.45 35.45 35.45 |
| 22 | Combustible waste | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
39.95 39.95 39.95 39.95 39.95 39.95 |
TABLE 2
| Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
|---|---|---|---|---|
| 1 | Aviation gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0747 0.0747 0.0747 0.0747 0 0 |
| 2 | Aviation turbo fuel | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0775 0.0775 0.0775 0.0775 0 0 |
| 3 | Butane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0534 0.0534 0.0534 0.0534 0.0534 0.0534 |
| 4 | Ethane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0306 0.0306 0.0306 0.0306 0.0306 0.0306 |
| 5 | Gas liquids | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0499 0.0499 0.0499 0.0499 0.0499 0.0499 |
| 6 | Gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0663 0.0663 0.0663 0.0663 0.0663 0.0663 |
| 7 | Heavy fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0956 0.0956 0.0956 0.0956 0.0956 0.0956 |
| 8 | Kerosene | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0775 0.0775 0.0775 0.0775 0.0775 0.0775 |
| 9 | Light fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0805 0.0805 0.0805 0.0805 0.0805 0.0805 |
| 10 | Methanol | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0329 0.0329 0.0329 0.0329 0.0329 0.0329 |
| 11 | Naphtha | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0676 0.0676 0.0676 0.0676 0.0676 0.0676 |
| 12 | Petroleum coke | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1151 0.1151 0.1151 0.1151 0.1151 0.1151 |
| 13 | Pentanes plus | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0534 0.0534 0.0534 0.0534 0.0534 0.0534 |
| 14 | Propane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0464 0.0464 0.0464 0.0464 0.0464 0.0464 |
| 15 | Coke oven gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0210 0.0210 0.0210 0.0210 0.0210 0.0210 |
| 16 | Marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0587 0.0587 0.0587 0.0587 0.0587 0.0587 |
| 17 | Non-marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0776 0.0776 0.0776 0.0776 0.0776 0.0776 |
| 18 | Still gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0810 0.0810 0.0810 0.0810 0.0810 0.0810 |
| 19 | Coke | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
95.39 95.39 95.39 95.39 95.39 95.39 |
| 20 | High heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
67.55 67.55 67.55 67.55 67.55 67.55 |
| 21 | Low heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
53.17 53.17 53.17 53.17 53.17 53.17 |
| 22 | Combustible waste | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
59.92 59.92 59.92 59.92 59.92 59.92 |
TABLE 3
| Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
|---|---|---|---|---|
| 1 | Aviation gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0995 0.0995 0.0995 0.0995 0 0 |
| 2 | Aviation turbo fuel | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1033 0.1033 0.1033 0.1033 0 0 |
| 3 | Butane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0712 0.0712 0.0712 0.0712 0.0712 0.0712 |
| 4 | Ethane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0408 0.0408 0.0408 0.0408 0.0408 0.0408 |
| 5 | Gas liquids | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0666 0.0666 0.0666 0.0666 0.0666 0.0666 |
| 6 | Gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0884 0.0884 0.0884 0.0884 0.0884 0.0884 |
| 7 | Heavy fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1275 0.1275 0.1275 0.1275 0.1275 0.1275 |
| 8 | Kerosene | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1033 0.1033 0.1033 0.1033 0.1033 0.1033 |
| 9 | Light fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1073 0.1073 0.1073 0.1073 0.1073 0.1073 |
| 10 | Methanol | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0439 0.0439 0.0439 0.0439 0.0439 0.0439 |
| 11 | Naphtha | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0902 0.0902 0.0902 0.0902 0.0902 0.0902 |
| 12 | Petroleum coke | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1535 0.1535 0.1535 0.1535 0.1535 0.1535 |
| 13 | Pentanes plus | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0712 0.0712 0.0712 0.0712 0.0712 0.0712 |
| 14 | Propane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0619 0.0619 0.0619 0.0619 0.0619 0.0619 |
| 15 | Coke oven gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0280 0.0280 0.0280 0.0280 0.0280 0.0280 |
| 16 | Marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0783 0.0783 0.0783 0.0783 0.0783 0.0783 |
| 17 | Non-marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1034 0.1034 0.1034 0.1034 0.1034 0.1034 |
| 18 | Still gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1080 0.1080 0.1080 0.1080 0.1080 0.1080 |
| 19 | Coke | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
127.19 127.19 127.19 127.19 127.19 127.19 |
| 20 | High heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
90.07 90.07 90.07 90.07 90.07 90.07 |
| 21 | Low heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
70.90 70.90 70.90 70.90 70.90 70.90 |
| 22 | Combustible waste | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
79.89 79.89 79.89 79.89 79.89 79.89 |
TABLE 4
| Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
|---|---|---|---|---|
| 1 | Aviation gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1244 0.1244 0.1244 0.1244 0 0 |
| 2 | Aviation turbo fuel | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1291 0.1291 0.1291 0.1291 0 0 |
| 3 | Butane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0890 0.0890 0.0890 0.0890 0.0890 0.0890 |
| 4 | Ethane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0509 0.0509 0.0509 0.0509 0.0509 0.0509 |
| 5 | Gas liquids | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0832 0.0832 0.0832 0.0832 0.0832 0.0832 |
| 6 | Gasoline | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1105 0.1105 0.1105 0.1105 0.1105 0.1105 |
| 7 | Heavy fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1593 0.1593 0.1593 0.1593 0.1593 0.1593 |
| 8 | Kerosene | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1291 0.1291 0.1291 0.1291 0.1291 0.1291 |
| 9 | Light fuel oil | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1341 0.1341 0.1341 0.1341 0.1341 0.1341 |
| 10 | Methanol | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0549 0.0549 0.0549 0.0549 0.0549 0.0549 |
| 11 | Naphtha | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1127 0.1127 0.1127 0.1127 0.1127 0.1127 |
| 12 | Petroleum coke | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1919 0.1919 0.1919 0.1919 0.1919 0.1919 |
| 13 | Pentanes plus | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0890 0.0890 0.0890 0.0890 0.0890 0.0890 |
| 14 | Propane | $/litre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0774 0.0774 0.0774 0.0774 0.0774 0.0774 |
| 15 | Coke oven gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0350 0.0350 0.0350 0.0350 0.0350 0.0350 |
| 16 | Marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.0979 0.0979 0.0979 0.0979 0.0979 0.0979 |
| 17 | Non-marketable natural gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1293 0.1293 0.1293 0.1293 0.1293 0.1293 |
| 18 | Still gas | $/cubic metre | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
0.1350 0.1350 0.1350 0.1350 0.1350 0.1350 |
| 19 | Coke | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
158.99 158.99 158.99 158.99 158.99 158.99 |
| 20 | High heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
112.58 112.58 112.58 112.58 112.58 112.58 |
| 21 | Low heat value coal | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
88.62 88.62 88.62 88.62 88.62 88.62 |
| 22 | Combustible waste | $/tonne | (a) Ontario (b) New Brunswick (c) Manitoba (d) Saskatchewan (e) Yukon (f) Nunavut |
99.87 99.87 99.87 99.87 99.87 99.87 |
Coming into Force
5 (1) Sections 1 and 3 come into force on April 1, 2019.
(2) Sections 2 and 4 come into force on July 1, 2019.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issues
The Greenhouse Gas Pollution Pricing Act (GGPPA) received royal assent on June 21, 2018. footnote 2 The GGPPA provides the legal framework and enabling authorities for the federal carbon pollution pricing backstop system (the federal backstop system) for the purpose of ensuring that the pricing of greenhouse gas (GHG) emissions is applied broadly in Canada. The federal backstop system has two components: a charge on fossil fuels and an output-based pricing system (OBPS) for large industry. Further, the GGPPA provides the Governor in Council with authority to determine in which provinces, territories and areas the GGPPA applies, by amending Schedule 1 to the GGPPA through regulations and, with respect to the fuel charge, by amending Schedule 2 to the GGPPA through regulations. Amendments to Schedule 1 take into account recommendations resulting from the assessment of the stringency of provincial and territorial pollution pricing systems and alignment with the benchmark elements of the Pan-Canadian Approach to Pricing Carbon Pollution (the Benchmark), including the additional published guidance on the Benchmark.footnote 3, footnote 4 The federal backstop system will apply, in whole or in part, in those provinces, territories and areas listed in Schedule 1 (backstop jurisdictions). Currently, Part 1 of Schedule 1 does not list any backstop jurisdictions. It is necessary to list specific provinces and territories in Part 1 of Schedule 1 to have the fuel charge component of the federal backstop system apply to these jurisdictions.
Background
At the United Nations Framework Convention on Climate Change conference in December 2015, the international community, including Canada, concluded the Paris Agreement, which is intended to reduce GHG emissions to limit the rise in global average temperature to less than two degrees Celsius (2 °C) and to pursue efforts to limit it to 1.5 °C above pre-industrial levels. It is widely recognized that economy-wide pollution pricing is the most efficient way to reduce GHG emissions. Pricing pollution drives innovative solutions to provide low-carbon choices for consumers and businesses. As part of its commitments made under the Paris Agreement, Canada pledged to reduce national GHG emissions by 30% below 2005 levels by 2030.
In October 2016, the Government of Canada published the Pan-Canadian Approach to Pricing Carbon Pollution, which outlines the principles on which the pricing of pollution in Canada will be based.footnote 5This publication also states that a federal backstop system will apply in all Canadian jurisdictions that do not have a pollution pricing system in place that aligns with the Benchmark by 2018. The Benchmark is intended to ensure that pollution pricing applies to a broad set of emission sources across Canada, with increasing stringency over time. The complete Benchmark is presented as an annex at the end of this Regulatory Impact Analysis Statement.
Part 1 of the GGPPA, administered by the Canada Revenue Agency, establishes a charge on fossil fuels — known as the fuel charge — that will generally be paid by fuel producers or distributors and generally applies to fossil fuels produced, delivered or used in a backstop jurisdiction, brought into a backstop jurisdiction from another place in Canada, or imported into Canada at a location in a backstop jurisdiction. Part 1 of the GGPPA provides the legal framework and enabling authorities for the fuel charge with the aim of ensuring that the pricing of GHG emissions is applied broadly in Canada. The fuel charge applies at the rates set out in Schedule 2 to the GGPPA and those rates vary by fuel type. The rates increase annually up to 2022.
Part 2 of the GGPPA, administered by the Department of the Environment, provides authority to establish an OBPS. The aim of the OBPS is to minimize competitiveness risks for emissions-intensive and trade-exposed facilities in backstop jurisdictions, while retaining a price signal on pollution and thus an incentive to reduce GHG emissions. Facilities participating in the OBPS will be able to purchase charge-free fuel and will instead face a compliance obligation on the portion of their GHG emissions that exceed prescribed limits. Participants will have the option to comply with the OBPS regulations by either remitting eligible compliance units or paying the excess emissions charge, or through a combination of these options.
Schedule 1 to the GGPPA is divided into two parts. Part 1 of the GGPPA (the fuel charge) will apply in the backstop jurisdictions listed in Part 1 of Schedule 1 to the GGPPA. Similarly, facilities that meet specified criteria and are located in any of the backstop jurisdictions listed in Part 2 of Schedule 1 to the GGPPA will be subject to Part 2 of the GGPPA (the OBPS). These lists take into account recommendations resulting from the assessment of the stringency of provincial and territorial pollution pricing systems and alignment with the Benchmark.
Objective
The objective of the regulations amending Part 1 of Schedule 1 and Schedule 2 to the GGPPA (the Regulations) is to add a list of provinces and territories to Part 1 of Schedule 1 and Schedule 2 in order to have Part 1 of the GGPPA apply in these backstop jurisdictions. The Regulations also provide relief, by applying a fuel charge rate of zero dollars per litre for aviation gasoline and aviation turbo fuel for the territories listed in Part 1 of Schedule 1 and Schedule 2.
Description
In accordance with subsections 166(2) and (4) of the GGPPA, the Regulations identify the jurisdictions in which the fuel charge under Part 1 of the GGPPA will apply by adding the following provinces and territories to Part 1 of Schedule 1 and Schedule 2 to the GGPPA:
- Ontario
- New Brunswick
- Manitoba
- Saskatchewan
- Yukon
- Nunavut
The Regulations come into force on April 1, 2019, for the provinces listed in Part 1 of Schedule 1 and Schedule 2 to the GGPPA and on July 1, 2019, for the territories (Yukon and Nunavut) listed in those Schedules.
Schedule 2 to the GGPPA is also amended by the Regulations to specify the rates of the fuel charge that will apply in each jurisdiction. The fuel charge rates reflect a carbon pollution price of $20 per tonne of carbon dioxide equivalent (CO2e) in 2019, rising by $10 per tonne annually to $50 per tonne in 2022. For the provinces of Ontario, New Brunswick, Manitoba and Saskatchewan, the rates will become effective as of April 2019, with future increases effective as of April of each year specified in the tables in Schedule 2.
The fuel charge rates that will apply in Yukon and Nunavut will become effective as of July 2019, with future increases effective as of April 1 of each year specified in the tables in Schedule 2. The Regulations also provide that a fuel charge rate of zero dollars per litre will apply to aviation gasoline and aviation turbo fuel for Yukon and Nunavut.
Regulatory development
Consultation
In March 2016, Canada’s First Ministers committed to putting Canada on a credible path to meet or exceed its commitments made under the Paris Agreement. The First Ministers agreed that such a commitment would require transitioning to a low-carbon economy by adopting a broad range of domestic measures, including pollution pricing, adapted to the specific circumstances of each province and territory.
On December 9, 2016, the Pan-Canadian Framework on Clean Growth and Climate Change (the Pan-Canadian Framework) was finalized at a climate-focused First Ministers meeting in Ottawa. A central component of the Pan-Canadian Framework is the pricing of carbon pollution, which is expected to lead to substantial GHG emission reductions, contributing to meeting Canada’s international commitments and the transition to a low-carbon economy.
The federal government is committed to ensuring that the provinces and territories have the flexibility to design their own policies and programs, while ensuring that pollution pricing applies to a broad set of GHG emission sources across Canada with increasing stringency over time. Provinces and territories can implement the type of pollution pricing system that makes sense for their specific circumstances (i.e. either an explicit price-based system or a cap-and-trade system).
In May 2017, the Government of Canada released a technical paper on the federal backstop system describing the two main components of the system:
- (i) a charge on fossil fuels that is generally payable by fuel producers or distributors, with rates that will be set for each fuel such that they are equivalent to $20 per tonne of CO2e in 2019, rising by $10 per year to $50 per tonne of CO2e in 2022; and
- (ii) an OBPS for large facilities in emissions-intensive and trade-exposed sectors, with an opportunity for smaller facilities in these sectors to voluntarily participate in the system.footnote 6
In December 2017, the Government of Canada requested that provinces and territories provide information by September 1, 2018, describing how they intend to meet the Benchmark.
In January 2018, the federal government released draft legislative proposals relating to the proposed federal backstop system for public comment. On March 27, 2018, the Government of Canada tabled the GGPPA in the House of Commons, as part of the Budget Implementation Act, 2018, No. 1 (Bill C-74). On June 21, 2018, Bill C-74, including the GGPPA, received royal assent.footnote 7
Also in January 2018, the Government of Canada released a draft regulatory framework for the OBPS outlining the design of the system. footnote 8 Further, in May 2018, the Department of the Environment published a document related to the regulatory framework providing additional details on compliance units and their use in the OBPS. footnote 9 In setting output-based standards, the Department of the Environment is taking into account the emissions intensity and trade exposure of each sector, as well as other factors that may lead a sector to be at competitiveness risk due to the pricing of pollution.
On October 23, 2018, after the review of each provincial and territorial system, the federal government announced that it will implement the federal backstop system, in whole or in part, in 2019, in any province or territory that has requested it or that does not have a pollution pricing system in place that aligns with the Benchmark. The assessment process considered how the elements of the given provincial or territorial pollution pricing system contribute as a whole to meeting the Benchmark.
On October 31, 2018, regulatory amendments on the OBPS were published in the Canada Gazette Part II. These included the Order Amending Part 2 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act (SOR/2018-212) [listing provinces and territories for the purposes of the OBPS], the Notice Establishing Criteria Respecting Facilities and Persons and Publishing Measures (Registration Notice), and the Greenhouse Gas Emissions Information Production Order (Information Order).
Regulatory analysis
Benefits and costs
The Regulations will be administered and enforced as part of the fuel charge regime under Part 1 of the GGPPA, and any requirements relating to the fuel charge under Part 1 of the GGPPA are derived from the GGPPA itself. Accordingly, the Regulations do not increase or decrease the level of costs imposed on Canadians, businesses, governments or other stakeholders.
Small business lens
As the fuel charge requirements under Part 1 of the GGPPA generally apply to fuel producers and fuel distributors upstream in the distribution chain, small businesses are not expected to incur significant compliance costs due to the listing of backstop jurisdictions in Part 1 of Schedule 1 and Schedule 2 to the GGPPA. As a result, the small business lens does not apply to the Regulations.
“One-for-One” Rule
The Regulations trigger the application of Part 1 of the GGPPA, and any requirements relating to the fuel charge under Part 1 of the GGPPA are derived from the GGPPA itself. Accordingly, the Regulations do not increase or decrease the level of administrative burden imposed on business; therefore, the “One-for-One” Rule does not apply.
Regulatory cooperation and alignment
The Regulations are not related to a work plan or commitment under a formal regulatory cooperation forum.
Strategic environmental assessment
The Regulations trigger the application of Part 1 of the GGPPA, which is an essential component of the Pan-Canadian Approach to Pricing Carbon Pollution. Carbon pollution pricing intends to reduce GHG emissions in the long term by encouraging behavioural changes and stimulating investments in low-carbon innovation. Implementing the federal backstop enables implementation of the pan-Canadian approach to pricing carbon pollution and extending pollution pricing throughout Canada. By helping to ensure that all jurisdictions across Canada have a price on carbon pollution that meets the federal standard, it will support the reduction of GHG emissions and help achieve the objectives of protecting the environment, stimulating investments in low-carbon innovation and creating a sustainable clean-growth economy. It will directly and indirectly contribute to all of the goals of the 2016–2019 Federal Sustainable Development Strategy, but particularly to the goals of effective action on climate change, clean growth and clean energy.footnote 10
Gender-based analysis plus (GBA+)
The Regulations trigger the application of Part 1 of the GGPPA, which is an essential component of the Pan-Canadian Approach to Pricing Carbon Pollution.
The GBA+ concluded that the application of the carbon pollution price can have disproportionate impacts on low-income and vulnerable populations. These impacts are neutralized or mitigated in the Pan-Canadian Approach to Pricing Carbon Pollution through the recycling of the direct proceeds to individuals. Carbon pollution pricing, with well designed proceed return as a core element, will minimize the impacts of climate change on Canadians and the Canadian economy contributing to the overall resilience of the country and benefiting all, including potentially vulnerable groups, while maintaining the overall incentives of the price signal to incent behavioural change to reduce GHG emissions and help contribute to the Government’s climate change objectives. Proceeds recycling can also be directed to further mitigate climate change impacts, which can particularly benefit groups that are more vulnerable to the impacts of changing weather patterns.
On October 23, 2018, the Government announced that in Ontario, New Brunswick, Manitoba and Saskatchewan, the federal government will return the bulk of the direct proceeds from the fuel charge directly to individuals and families, through Climate Action Incentive payments, with a top-up of 10% for those living in small and rural communities. The remainder will go to support small and medium-sized businesses, municipalities, universities, colleges, schools, hospitals, non-profits and Indigenous communities.
Implementation, compliance and enforcement, and service standards
The Regulations will be implemented, administered and enforced by the Canada Revenue Agency and, at the border, by the Canada Border Services Agency as part of the fuel charge regime under Part 1 of the GGPPA.
Contacts
Gervais Coulombe
Sales Tax Division
Tax Policy Branch
Department of Finance Canada
90 Elgin Street
Ottawa, Ontario
K1A 0G5
Telephone: 613‑369‑3773
Ron Hagmann
Excise and GST/HST Rulings Directorate
Canada Revenue Agency
Place de Ville, Tower A, 9th Floor
320 Queen Street
Ottawa, Ontario
K1A 0L5
Telephone: 613‑670‑7360
Annex: The Benchmark
The Government of Canada published the Pan-Canadian Approach to Pricing Carbon Pollution on October 3, 2016, and followed up with the publication of guidance on the Benchmark in August 2017 and supplemental guidance on the Benchmark in December 2017. The Benchmark is comprised of the elements below; the guidance published in 2017 is shown in italics.
1. Timely introduction
- All jurisdictions will have carbon pricing by 2018.
- The federal government will provide technical assistance to provinces and territories to support the design of their carbon pollution pricing systems, as requested, such as modelling GHG emission projections and economic analysis.
2. Common scope
- Pricing will be based on GHG emissions and applied to a common and broad set of sources to ensure effectiveness and minimize interprovincial competitiveness impacts. At a minimum, carbon pricing should apply to substantively the same sources as British Columbia’s carbon tax.
- At the time of the publication of the Benchmark in October 2016, British Columbia’s carbon tax applied broadly across the economy, including but not limited to fuels that produce GHG emissions when combusted in transportation, heating, electricity, light manufacturing and industry. There are specific exemptions from British Columbia’s carbon tax for the use of fuels where combustion does not occur (e.g., fuel used as a raw material in industrial processes, fuel used to remove natural gas liquid or impurities in the processing of natural gas). Other specific exemptions from British Columbia’s carbon tax, as in effect in 2016, included marked gasoline and diesel used for certain agricultural purposes, and fuels sold for export.
- The goal of the Benchmark is to ensure that each carbon pollution pricing system applies to a broad base of emissions. Each jurisdiction should apply its carbon pollution pricing system to essentially the same sources and fuels as those to which British Columbia’s carbon tax applies, to the extent to which the same sources exist in the jurisdiction.
3. Two systems
- Jurisdictions can implement: (i) an explicit price-based system (a carbon tax like British Columbia’s or a carbon levy and performance-based emissions system like in Alberta); or (ii) a cap-and-trade system (e.g., in Quebec).
4. Legislated increases in stringency, based on modelling, to contribute to our national target and provide market certainty
- For jurisdictions with an explicit price-based system, the carbon price should start at a minimum of $10 per tonne in 2018, and rise by $10 per year to $50 per tonne in 2022.
- Carbon pricing systems should be designed to achieve incremental GHG emissions reductions in the 2018 to 2022 period through a clear price signal flowing from the level at which caps are set or an explicit carbon price, meaning fewer emissions than would have occurred without the pricing system in place.
- The following guidance applies to jurisdictions with cap-and-trade systems:
- (i) Each cap-and-trade system must incorporate a 2030 emissions reduction target equal to or greater than Canada’s 30% reduction target.
- (ii) Cap-and-trade systems must decline (more stringent) annual caps to at least 2022 that correspond, at a minimum, to the projected emissions reductions resulting from the carbon price that year in price-based systems.
- (iii) Caps must cover a broad base of emissions comparable to British Columbia’s carbon tax, decline in time and result in incremental reductions, and cannot be adjusted upwards in order to accommodate large new activities.
- (iv) Jurisdictions can set an annual or a multi-year compliance period.
- (v) The emission limits set by the caps for 2018 to 2022 should be less than or equal to a modelled estimate of the emissions that would have resulted in that jurisdiction from applying the Benchmark carbon price during that period to the sources covered by the cap. The baseline for modelling will be an accurate and recent projection, informed by Canada and the jurisdiction.
- (vi) Cap-and-trade systems should include best practices in use in cap-and-trade systems internationally and in Canada (e.g., robust quantification methodologies; requirements for the third-party verification of compliance reports; transparent registries for the tracking of units; and strong reporting requirements).
- (vii) A reserve should be established from which emission allowances can be released to moderate sudden pressures in the market that could significantly and rapidly change prices to capped participants, including new entrants.footnote 11
- (viii) The system should include other measures to support price predictability and market stability, including auction floor prices that increase consistently.footnote 12
- (ix) Allowances should be distributed and reported in a transparent manner while protecting confidential business information, including methodologies for allowance allocation and quantities of free allowance provided.
- (x) Clear rules should define the treatment of allowances and credits held by any capped facilities that cease operation.
- (xi) There should be clear rules and limits to prevent market manipulation.
- The following guidance applies to jurisdictions with explicit price-based systems similar to Alberta’s hybrid system:
- (i) A hybrid system should include two components: a carbon levy (or tax) that applies to fossil fuels and an output-based pricing system that applies to designated facilities or sectors (which do not pay the levy on the fuel they use). The carbon pollution price in both components of a hybrid system – the fuel levy and the fixed payment per tonne of CO2e that is a compliance option under the output-based pricing component – should be at least equal to the Benchmark carbon pollution price.
- (ii) The output-based pricing system component should not apply to fuel distributed to consumers.
- (iii) Jurisdictions should tailor the emission intensity standards in the output-based pricing component of their hybrid system to the circumstances of their sectors. These standards should be at levels that drive improved performance in carbon intensity over the 2018 to 2022 period, and should account for best-in-class performance. The reviews of carbon pricing committed to in the Pan-Canadian Framework will consider the adequacy of these emission intensity standards, accounting for their impacts on emissions, innovation, competitiveness and carbon leakage.
- (iv) The output-based pricing component should include best practices in emission trading systems internationally and in Canada (e.g., robust quantification methodologies; requirements for the third-party verification of compliance reports; transparent registries for the tracking of units; and strong reporting requirements).
5. Revenues remain in the jurisdiction of origin
- The Government of Canada has committed to return the direct proceeds from carbon pricing to the jurisdiction of origin, where they may be used for various measures, including to address impacts on vulnerable populations and sectors and to support climate change and clean growth goals.
6. Federal backstop system
- The federal government will introduce an explicit price-based carbon pricing system that will apply in jurisdictions that do not meet the Benchmark. The federal backstop system will be consistent with the principles set out in the Pan-Canadian Approach to Pricing Carbon Pollution and will return direct proceeds to the jurisdiction of origin.
- As committed to in the Pan-Canadian Framework, the federal government will:
- (i) work with the territories to find solutions that address their unique circumstances, including high costs of living and of energy, challenges with food security, and emerging economies; and
- (ii) engage Indigenous peoples to find solutions that address their unique circumstances, including high costs of living and of energy, challenges with food security, and emerging economies.
7. Five-year review
- The overall approach will be reviewed by early 2022 to confirm the path forward, including continued increases in stringency. The review will account for progress and for the actions of other countries in response to carbon pricing, as well as recognition of permits or credits imported from other countries.
- Federal, provincial and territorial governments will work together to establish the approach to the review of carbon pollution pricing, including expert assessment of stringency and effectiveness that compares carbon pollution pricing systems across Canada, which will be completed by early 2022 to provide certainty on the path forward.
- An interim report will be completed in 2020, and reviewed and assessed by Canada’s First Ministers.
- The federal, provincial and territorial governments will work together to assess approaches and best practices to address the competitiveness of emissions-intensive and trade-exposed sectors. This work started in 2017.
8. Reporting
- Jurisdictions should provide regular, transparent and verifiable reports on the outcomes and impacts of carbon pricing policies.
- The federal government will:
- (i) continue to collaborate with provinces and territories on efforts to track and report GHG emissions in a consistent way across the country;
- (ii) take regular stock of progress under carbon pollution pricing in order to report to Canadians and to inform Canada’s future commitments in accordance with the Paris Agreement;
- (iii) engage with external experts to provide informed advice to First Ministers and decision makers, assess the effectiveness of measures, including through the use of modelling, and identify best practices; and
- (iv) collaborate with provincial and territorial governments, through the Canadian Council of Ministers of Environment to examine:
- (a) options for a pan-Canadian GHG offset framework; and
- (b) international mitigation opportunities including the scope for ongoing recognition by Canadian jurisdictions of credits associated with reductions occurring in other countries.
- Jurisdictions should require, at minimum, annual reporting of emissions by regulated entities.
- Jurisdictions with emissions trading should establish registries for tracking tradable units (allowances and credits), and should report periodically on market holdings and activities.