Part 1 of the Greenhouse Gas Pollution Pricing Act Regulations (Alberta): SOR/2019-294

Canada Gazette, Part II, Volume 153, Number 17

Registration

SOR/2019-294 August 8, 2019

GREENHOUSE GAS POLLUTION PRICING ACT

P.C. 2019-1139 August 7, 2019

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 166 and 168 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 Part 1 of the Greenhouse Gas Pollution Pricing Act Regulations (Alberta).

Part 1 of the Greenhouse Gas Pollution Pricing Act Regulations (Alberta)

Adjustment Day

Prescribed day

1 For the purposes of the definition adjustment day in section 3 of the Greenhouse Gas Pollution Pricing Act, January 1, 2020 is a prescribed day.

Adaptation

2 For the purposes of the fuel charge system, as defined in subsection 168(1) of the Greenhouse Gas Pollution Pricing Act, and of applying subsection 38(1) of that Act in respect of the adjustment day that is January 1, 2020, paragraph (a) of the description of B in subsection 38(1) of that Act is adapted as follows:

Amendments to the Greenhouse Gas Pollution Pricing Act

3 Table 1 of Part 1 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act footnote 1 is amended by adding the following in numerical order:

Item

Name of Province

4.1

Alberta

4 The portion of items 1 to 22 of Table 1 of Schedule 2 to the Act in columns 4 and 5 is replaced by the following:

Column 1

Item

Column 4

Listed Province

Column 5

Rate

1

(a) Ontario

0.0498

(b) New Brunswick

0.0498

(c) Manitoba

0.0498

(d) Saskatchewan

0.0498

(e) Alberta

0.0498

(f) Yukon

0

(g) Nunavut

0

2

(a) Ontario

0.0516

(b) New Brunswick

0.0516

(c) Manitoba

0.0516

(d) Saskatchewan

0.0516

(e) Alberta

0.0516

(f) Yukon

0

(g) Nunavut

0

3

(a) Ontario

0.0356

(b) New Brunswick

0.0356

(c) Manitoba

0.0356

(d) Saskatchewan

0.0356

(e) Alberta

0.0356

(f) Yukon

0.0356

(g) Nunavut

0.0356

4

(a) Ontario

0.0204

(b) New Brunswick

0.0204

(c) Manitoba

0.0204

(d) Saskatchewan

0.0204

(e) Alberta

0.0204

(f) Yukon

0.0204

(g) Nunavut

0.0204

5

(a) Ontario

0.0333

(b) New Brunswick

0.0333

(c) Manitoba

0.0333

(d) Saskatchewan

0.0333

(e) Alberta

0.0333

(f) Yukon

0.0333

(g) Nunavut

0.0333

6

(a) Ontario

0.0442

(b) New Brunswick

0.0442

(c) Manitoba

0.0442

(d) Saskatchewan

0.0442

(e) Alberta

0.0442

(f) Yukon

0.0442

(g) Nunavut

0.0442

7

(a) Ontario

0.0637

(b) New Brunswick

0.0637

(c) Manitoba

0.0637

(d) Saskatchewan

0.0637

(e) Alberta

0.0637

(f) Yukon

0.0637

(g) Nunavut

0.0637

8

(a) Ontario

0.0516

(b) New Brunswick

0.0516

(c) Manitoba

0.0516

(d) Saskatchewan

0.0516

(e) Alberta

0.0516

(f) Yukon

0.0516

(g) Nunavut

0.0516

9

(a) Ontario

0.0537

(b) New Brunswick

0.0537

(c) Manitoba

0.0537

(d) Saskatchewan

0.0537

(e) Alberta

0.0537

(f) Yukon

0.0537

(g) Nunavut

0.0537

10

(a) Ontario

0.0220

(b) New Brunswick

0.0220

(c) Manitoba

0.0220

(d) Saskatchewan

0.0220

(e) Alberta

0.0220

(f) Yukon

0.0220

(g) Nunavut

0.0220

11

(a) Ontario

0.0451

(b) New Brunswick

0.0451

(c) Manitoba

0.0451

(d) Saskatchewan

0.0451

(e) Alberta

0.0451

(f) Yukon

0.0451

(g) Nunavut

0.0451

12

(a) Ontario

0.0767

(b) New Brunswick

0.0767

(c) Manitoba

0.0767

(d) Saskatchewan

0.0767

(e) Alberta

0.0767

(f) Yukon

0.0767

(g) Nunavut

0.0767

13

(a) Ontario

0.0356

(b) New Brunswick

0.0356

(c) Manitoba

0.0356

(d) Saskatchewan

0.0356

(e) Alberta

0.0356

(f) Yukon

0.0356

(g) Nunavut

0.0356

14

(a) Ontario

0.0310

(b) New Brunswick

0.0310

(c) Manitoba

0.0310

(d) Saskatchewan

0.0310

(e) Alberta

0.0310

(f) Yukon

0.0310

(g) Nunavut

0.0310

15

(a) Ontario

0.0140

(b) New Brunswick

0.0140

(c) Manitoba

0.0140

(d) Saskatchewan

0.0140

(e) Alberta

0.0140

(f) Yukon

0.0140

(g) Nunavut

0.0140

16

(a) Ontario

0.0391

(b) New Brunswick

0.0391

(c) Manitoba

0.0391

(d) Saskatchewan

0.0391

(e) Alberta

0.0391

(f) Yukon

0.0391

(g) Nunavut

0.0391

17

(a) Ontario

0.0517

(b) New Brunswick

0.0517

(c) Manitoba

0.0517

(d) Saskatchewan

0.0517

(e) Alberta

0.0517

(f) Yukon

0.0517

(g) Nunavut

0.0517

18

(a) Ontario

0.0540

(b) New Brunswick

0.0540

(c) Manitoba

0.0540

(d) Saskatchewan

0.0540

(e) Alberta

0.0540

(f) Yukon

0.0540

(g) Nunavut

0.0540

19

(a) Ontario

63.59

(b) New Brunswick

63.59

(c) Manitoba

63.59

(d) Saskatchewan

63.59

(e) Alberta

63.59

(f) Yukon

63.59

(g) Nunavut

63.59

20

(a) Ontario

45.03

(b) New Brunswick

45.03

(c) Manitoba

45.03

(d) Saskatchewan

45.03

(e) Alberta

45.03

(f) Yukon

45.03

(g) Nunavut

45.03

21

(a) Ontario

35.45

(b) New Brunswick

35.45

(c) Manitoba

35.45

(d) Saskatchewan

35.45

(e) Alberta

35.45

(f) Yukon

35.45

(g) Nunavut

35.45

22

(a) Ontario

39.95

(b) New Brunswick

39.95

(c) Manitoba

39.95

(d) Saskatchewan

39.95

(e) Alberta

39.95

(f) Yukon

39.95

(g) Nunavut

39.95

5 The portion of items 1 to 22 of Table 2 of Schedule 2 to the Act in columns 4 and 5 is replaced by the following:

Column 1

Item

Column 4

Listed Province

Column 5

Rate

1

(a) Ontario

0.0747

(b) New Brunswick

0.0747

(c) Manitoba

0.0747

(d) Saskatchewan

0.0747

(e) Alberta

0.0747

(f) Yukon

0

(g) Nunavut

0

2

(a) Ontario

0.0775

(b) New Brunswick

0.0775

(c) Manitoba

0.0775

(d) Saskatchewan

0.0775

(e) Alberta

0.0775

(f) Yukon

0

(g) Nunavut

0

3

(a) Ontario

0.0534

(b) New Brunswick

0.0534

(c) Manitoba

0.0534

(d) Saskatchewan

0.0534

(e) Alberta

0.0534

(f) Yukon

0.0534

(g) Nunavut

0.0534

4

(a) Ontario

0.0306

(b) New Brunswick

0.0306

(c) Manitoba

0.0306

(d) Saskatchewan

0.0306

(e) Alberta

0.0306

(f) Yukon

0.0306

(g) Nunavut

0.0306

5

(a) Ontario

0.0499

(b) New Brunswick

0.0499

(c) Manitoba

0.0499

(d) Saskatchewan

0.0499

(e) Alberta

0.0499

(f) Yukon

0.0499

(g) Nunavut

0.0499

6

(a) Ontario

0.0663

(b) New Brunswick

0.0663

(c) Manitoba

0.0663

(d) Saskatchewan

0.0663

(e) Alberta

0.0663

(f) Yukon

0.0663

(g) Nunavut

0.0663

7

(a) Ontario

0.0956

(b) New Brunswick

0.0956

(c) Manitoba

0.0956

(d) Saskatchewan

0.0956

(e) Alberta

0.0956

(f) Yukon

0.0956

(g) Nunavut

0.0956

8

(a) Ontario

0.0775

(b) New Brunswick

0.0775

(c) Manitoba

0.0775

(d) Saskatchewan

0.0775

(e) Alberta

0.0775

(f) Yukon

0.0775

(g) Nunavut

0.0775

9

(a) Ontario

0.0805

(b) New Brunswick

0.0805

(c) Manitoba

0.0805

(d) Saskatchewan

0.0805

(e) Alberta

0.0805

(f) Yukon

0.0805

(g) Nunavut

0.0805

10

(a) Ontario

0.0329

(b) New Brunswick

0.0329

(c) Manitoba

0.0329

(d) Saskatchewan

0.0329

(e) Alberta

0.0329

(f) Yukon

0.0329

(g) Nunavut

0.0329

11

(a) Ontario

0.0676

(b) New Brunswick

0.0676

(c) Manitoba

0.0676

(d) Saskatchewan

0.0676

(e) Alberta

0.0676

(f) Yukon

0.0676

(g) Nunavut

0.0676

12

(a) Ontario

0.1151

(b) New Brunswick

0.1151

(c) Manitoba

0.1151

(d) Saskatchewan

0.1151

(e) Alberta

0.1151

(f) Yukon

0.1151

(g) Nunavut

0.1151

13

(a) Ontario

0.0534

(b) New Brunswick

0.0534

(c) Manitoba

0.0534

(d) Saskatchewan

0.0534

(e) Alberta

0.0534

(f) Yukon

0.0534

(g) Nunavut

0.0534

14

(a) Ontario

0.0464

(b) New Brunswick

0.0464

(c) Manitoba

0.0464

(d) Saskatchewan

0.0464

(e) Alberta

0.0464

(f) Yukon

0.0464

(g) Nunavut

0.0464

15

(a) Ontario

0.0210

(b) New Brunswick

0.0210

(c) Manitoba

0.0210

(d) Saskatchewan

0.0210

(e) Alberta

0.0210

(f) Yukon

0.0210

(g) Nunavut

0.0210

16

(a) Ontario

0.0587

(b) New Brunswick

0.0587

(c) Manitoba

0.0587

(d) Saskatchewan

0.0587

(e) Alberta

0.0587

(f) Yukon

0.0587

(g) Nunavut

0.0587

17

(a) Ontario

0.0776

(b) New Brunswick

0.0776

(c) Manitoba

0.0776

(d) Saskatchewan

0.0776

(e) Alberta

0.0776

(f) Yukon

0.0776

(g) Nunavut

0.0776

18

(a) Ontario

0.0810

(b) New Brunswick

0.0810

(c) Manitoba

0.0810

(d) Saskatchewan

0.0810

(e) Alberta

0.0810

(f) Yukon

0.0810

(g) Nunavut

0.0810

19

(a) Ontario

95.39

(b) New Brunswick

95.39

(c) Manitoba

95.39

(d) Saskatchewan

95.39

(e) Alberta

95.39

(f) Yukon

95.39

(g) Nunavut

95.39

20

(a) Ontario

67.55

(b) New Brunswick

67.55

(c) Manitoba

67.55

(d) Saskatchewan

67.55

(e) Alberta

67.55

(f) Yukon

67.55

(g) Nunavut

67.55

21

(a) Ontario

53.17

(b) New Brunswick

53.17

(c) Manitoba

53.17

(d) Saskatchewan

53.17

(e) Alberta

53.17

(f) Yukon

53.17

(g) Nunavut

53.17

22

(a) Ontario

59.92

(b) New Brunswick

59.92

(c) Manitoba

59.92

(d) Saskatchewan

59.92

(e) Alberta

59.92

(f) Yukon

59.92

(g) Nunavut

59.92

6 The portion of items 1 to 22 of Table 3 of Schedule 2 to the Act in columns 4 and 5 is replaced by the following:

Column 1

Item

Column 4

Listed Province

Column 5

Rate

1

(a) Ontario

0.0995

(b) New Brunswick

0.0995

(c) Manitoba

0.0995

(d) Saskatchewan

0.0995

(e) Alberta

0.0995

(f) Yukon

0

(g) Nunavut

0

2

(a) Ontario

0.1033

(b) New Brunswick

0.1033

(c) Manitoba

0.1033

(d) Saskatchewan

0.1033

(e) Alberta

0.1033

(f) Yukon

0

(g) Nunavut

0

3

(a) Ontario

0.0712

(b) New Brunswick

0.0712

(c) Manitoba

0.0712

(d) Saskatchewan

0.0712

(e) Alberta

0.0712

(f) Yukon

0.0712

(g) Nunavut

0.0712

4

(a) Ontario

0.0408

(b) New Brunswick

0.0408

(c) Manitoba

0.0408

(d) Saskatchewan

0.0408

(e) Alberta

0.0408

(f) Yukon

0.0408

(g) Nunavut

0.0408

5

(a) Ontario

0.0666

(b) New Brunswick

0.0666

(c) Manitoba

0.0666

(d) Saskatchewan

0.0666

(e) Alberta

0.0666

(f) Yukon

0.0666

(g) Nunavut

0.0666

6

(a) Ontario

0.0884

(b) New Brunswick

0.0884

(c) Manitoba

0.0884

(d) Saskatchewan

0.0884

(e) Alberta

0.0884

(f) Yukon

0.0884

(g) Nunavut

0.0884

7

(a) Ontario

0.1275

(b) New Brunswick

0.1275

(c) Manitoba

0.1275

(d) Saskatchewan

0.1275

(e) Alberta

0.1275

(f) Yukon

0.1275

(g) Nunavut

0.1275

8

(a) Ontario

0.1033

(b) New Brunswick

0.1033

(c) Manitoba

0.1033

(d) Saskatchewan

0.1033

(e) Alberta

0.1033

(f) Yukon

0.1033

(g) Nunavut

0.1033

9

(a) Ontario

0.1073

(b) New Brunswick

0.1073

(c) Manitoba

0.1073

(d) Saskatchewan

0.1073

(e) Alberta

0.1073

(f) Yukon

0.1073

(g) Nunavut

0.1073

10

(a) Ontario

0.0439

(b) New Brunswick

0.0439

(c) Manitoba

0.0439

(d) Saskatchewan

0.0439

(e) Alberta

0.0439

(f) Yukon

0.0439

(g) Nunavut

0.0439

11

(a) Ontario

0.0902

(b) New Brunswick

0.0902

(c) Manitoba

0.0902

(d) Saskatchewan

0.0902

(e) Alberta

0.0902

(f) Yukon

0.0902

(g) Nunavut

0.0902

12

(a) Ontario

0.1535

(b) New Brunswick

0.1535

(c) Manitoba

0.1535

(d) Saskatchewan

0.1535

(e) Alberta

0.1535

(f) Yukon

0.1535

(g) Nunavut

0.1535

13

(a) Ontario

0.0712

(b) New Brunswick

0.0712

(c) Manitoba

0.0712

(d) Saskatchewan

0.0712

(e) Alberta

0.0712

(f) Yukon

0.0712

(g) Nunavut

0.0712

14

(a) Ontario

0.0619

(b) New Brunswick

0.0619

(c) Manitoba

0.0619

(d) Saskatchewan

0.0619

(e) Alberta

0.0619

(f) Yukon

0.0619

(g) Nunavut

0.0619

15

(a) Ontario

0.0280

(b) New Brunswick

0.0280

(c) Manitoba

0.0280

(d) Saskatchewan

0.0280

(e) Alberta

0.0280

(f) Yukon

0.0280

(g) Nunavut

0.0280

16

(a) Ontario

0.0783

(b) New Brunswick

0.0783

(c) Manitoba

0.0783

(d) Saskatchewan

0.0783

(e) Alberta

0.0783

(f) Yukon

0.0783

(g) Nunavut

0.0783

17

(a) Ontario

0.1034

(b) New Brunswick

0.1034

(c) Manitoba

0.1034

(d) Saskatchewan

0.1034

(e) Alberta

0.1034

(f) Yukon

0.1034

(g) Nunavut

0.1034

18

(a) Ontario

0.1080

(b) New Brunswick

0.1080

(c) Manitoba

0.1080

(d) Saskatchewan

0.1080

(e) Alberta

0.1080

(f) Yukon

0.1080

(g) Nunavut

0.1080

19

(a) Ontario

127.19

(b) New Brunswick

127.19

(c) Manitoba

127.19

(d) Saskatchewan

127.19

(e) Alberta

127.19

(f) Yukon

127.19

(g) Nunavut

127.19

20

(a) Ontario

90.07

(b) New Brunswick

90.07

(c) Manitoba

90.07

(d) Saskatchewan

90.07

(e) Alberta

90.07

(f) Yukon

90.07

(g) Nunavut

90.07

21

(a) Ontario

70.90

(b) New Brunswick

70.90

(c) Manitoba

70.90

(d) Saskatchewan

70.90

(e) Alberta

70.90

(f) Yukon

70.90

(g) Nunavut

70.90

22

(a) Ontario

79.89

(b) New Brunswick

79.89

(c) Manitoba

79.89

(d) Saskatchewan

79.89

(e) Alberta

79.89

(f) Yukon

79.89

(g) Nunavut

79.89

7 The portion of items 1 to 22 of Table 4 of Schedule 2 to the Act in columns 4 and 5 is replaced by the following:

Column 1

Item

Column 4

Listed Province

Column 5

Rate

1

(a) Ontario

0.1244

(b) New Brunswick

0.1244

(c) Manitoba

0.1244

(d) Saskatchewan

0.1244

(e) Alberta

0.1244

(f) Yukon

0

(g) Nunavut

0

2

(a) Ontario

0.1291

(b) New Brunswick

0.1291

(c) Manitoba

0.1291

(d) Saskatchewan

0.1291

(e) Alberta

0.1291

(f) Yukon

0

(g) Nunavut

0

3

(a) Ontario

0.0890

(b) New Brunswick

0.0890

(c) Manitoba

0.0890

(d) Saskatchewan

0.0890

(e) Alberta

0.0890

(f) Yukon

0.0890

(g) Nunavut

0.0890

4

(a) Ontario

0.0509

(b) New Brunswick

0.0509

(c) Manitoba

0.0509

(d) Saskatchewan

0.0509

(e) Alberta

0.0509

(f) Yukon

0.0509

(g) Nunavut

0.0509

5

(a) Ontario

0.0832

(b) New Brunswick

0.0832

(c) Manitoba

0.0832

(d) Saskatchewan

0.0832

(e) Alberta

0.0832

(f) Yukon

0.0832

(g) Nunavut

0.0832

6

(a) Ontario

0.1105

(b) New Brunswick

0.1105

(c) Manitoba

0.1105

(d) Saskatchewan

0.1105

(e) Alberta

0.1105

(f) Yukon

0.1105

(g) Nunavut

0.1105

7

(a) Ontario

0.1593

(b) New Brunswick

0.1593

(c) Manitoba

0.1593

(d) Saskatchewan

0.1593

(e) Alberta

0.1593

(f) Yukon

0.1593

(g) Nunavut

0.1593

8

(a) Ontario

0.1291

(b) New Brunswick

0.1291

(c) Manitoba

0.1291

(d) Saskatchewan

0.1291

(e) Alberta

0.1291

(f) Yukon

0.1291

(g) Nunavut

0.1291

9

(a) Ontario

0.1341

(b) New Brunswick

0.1341

(c) Manitoba

0.1341

(d) Saskatchewan

0.1341

(e) Alberta

0.1341

(f) Yukon

0.1341

(g) Nunavut

0.1341

10

(a) Ontario

0.0549

(b) New Brunswick

0.0549

(c) Manitoba

0.0549

(d) Saskatchewan

0.0549

(e) Alberta

0.0549

(f) Yukon

0.0549

(g) Nunavut

0.0549

11

(a) Ontario

0.1127

(b) New Brunswick

0.1127

(c) Manitoba

0.1127

(d) Saskatchewan

0.1127

(e) Alberta

0.1127

(f) Yukon

0.1127

(g) Nunavut

0.1127

12

(a) Ontario

0.1919

(b) New Brunswick

0.1919

(c) Manitoba

0.1919

(d) Saskatchewan

0.1919

(e) Alberta

0.1919

(f) Yukon

0.1919

(g) Nunavut

0.1919

13

(a) Ontario

0.0890

(b) New Brunswick

0.0890

(c) Manitoba

0.0890

(d) Saskatchewan

0.0890

(e) Alberta

0.0890

(f) Yukon

0.0890

(g) Nunavut

0.0890

14

(a) Ontario

0.0774

(b) New Brunswick

0.0774

(c) Manitoba

0.0774

(d) Saskatchewan

0.0774

(e) Alberta

0.0774

(f) Yukon

0.0774

(g) Nunavut

0.0774

15

(a) Ontario

0.0350

(b) New Brunswick

0.0350

(c) Manitoba

0.0350

(d) Saskatchewan

0.0350

(e) Alberta

0.0350

(f) Yukon

0.0350

(g) Nunavut

0.0350

16

(a) Ontario

0.0979

(b) New Brunswick

0.0979

(c) Manitoba

0.0979

(d) Saskatchewan

0.0979

(e) Alberta

0.0979

(f) Yukon

0.0979

(g) Nunavut

0.0979

17

(a) Ontario

0.1293

(b) New Brunswick

0.1293

(c) Manitoba

0.1293

(d) Saskatchewan

0.1293

(e) Alberta

0.1293

(f) Yukon

0.1293

(g) Nunavut

0.1293

18

(a) Ontario

0.1350

(b) New Brunswick

0.1350

(c) Manitoba

0.1350

(d) Saskatchewan

0.1350

(e) Alberta

0.1350

(f) Yukon

0.1350

(g) Nunavut

0.1350

19

(a) Ontario

158.99

(b) New Brunswick

158.99

(c) Manitoba

158.99

(d) Saskatchewan

158.99

(e) Alberta

158.99

(f) Yukon

158.99

(g) Nunavut

158.99

20

(a) Ontario

112.58

(b) New Brunswick

112.58

(c) Manitoba

112.58

(d) Saskatchewan

112.58

(e) Alberta

112.58

(f) Yukon

112.58

(g) Nunavut

112.58

21

(a) Ontario

88.62

(b) New Brunswick

88.62

(c) Manitoba

88.62

(d) Saskatchewan

88.62

(e) Alberta

88.62

(f) Yukon

88.62

(g) Nunavut

88.62

22

(a) Ontario

99.87

(b) New Brunswick

99.87

(c) Manitoba

99.87

(d) Saskatchewan

99.87

(e) Alberta

99.87

(f) Yukon

99.87

(g) Nunavut

99.87

Coming into Force

January 1, 2020

8 These Regulations come into force on January 1, 2020.

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 applies, in whole or in part, in those provinces, territories and areas listed in Schedule 1 (backstop jurisdictions). As of April 1, 2019, Part 1 of Schedule 1 lists Ontario, New Brunswick, Manitoba and Saskatchewan as backstop jurisdictions for the purpose of the fuel charge and, as of July 1, 2019, lists Yukon and Nunavut. It is necessary to list Alberta in Part 1 of Schedule 1 to have the fuel charge component of the federal backstop system apply to that province, thereby ensuring that carbon pricing applies broadly across Canada.

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 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 5 This 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 Benchmark was published in Part II of the Canada Gazette on April 3, 2019, as an annex at the end of the Regulatory Impact Analysis Statement for the Regulations Amending Part 1 of Schedule 1 and Schedule 2 to the Greenhouse Gas Pollution Pricing Act footnote 6 and on October 31, 2018, as an annex at the end of the Regulatory Impact Analysis Statement for the Order Amending Part 2 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act. footnote 7

Part 1 of the GGPPA, administered by the Canada Revenue Agency, establishes a charge on fossil fuels — known as the fuel charge — that is generally 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 are generally able to purchase charge-free fuel and instead face a compliance obligation on the portion of their GHG emissions that exceed prescribed limits. Participants 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) applies 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 are 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 Part 1 of the Greenhouse Gas Pollution Pricing Act Regulations (Alberta) [the Regulations] is to ensure carbon pricing applies broadly in Canada by adding Alberta to Part 1 of Schedule 1 and to Schedule 2 in order to have Part 1 of the GGPPA (i.e. the fuel charge) apply in that backstop jurisdiction.

Description

In accordance with subsections 166(2) and (4) of the GGPPA, the Regulations identify Alberta as a jurisdiction in which the fuel charge under Part 1 of the GGPPA will apply by adding that province to Part 1 of Schedule 1 to the GGPPA. The Regulations come into force on January 1, 2020.

Schedule 2 to the GGPPA is also amended by the Regulations to specify the rates of the fuel charge that will apply in Alberta. The fuel charge rates reflect a carbon pollution price of $20 per tonne of carbon dioxide equivalent (CO2e) in 2020, rising by $10 per tonne annually to $50 per tonne in 2022. For Alberta, the rates will become effective as of January 1, 2020, with future increases effective as of April of each year specified in the tables in Schedule 2.

The Regulations also include a rule prescribing January 1, 2020, as an “adjustment day” for Alberta. If a person holds fuel in Alberta at the beginning of that day, that person may have obligations under Part 1 of the GGPPA, including an obligation to pay a charge in respect of the fuel held at that time.

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:

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 9

Also in January 2018, the Government of Canada released a draft regulatory framework for the OBPS outlining the design of the system. footnote 10 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 11 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 its intention to 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.

At the time of the initial assessment, Alberta’s carbon pollution pricing system was found to meet the Benchmark and was comprised of two components — a carbon levy on fuel and an output-based pricing system. However, the Legislative Assembly of Alberta repealed the Alberta carbon levy effective as of May 30, 2019.

Modern treaty obligations and Indigenous engagement and consultation

In respect of the Regulations, no impacts have been identified in respect of the Government’s obligations in relation to Indigenous rights protected by section 35 of the Constitution Acts, 1867 to 1982, modern treaties or international human rights obligations.

Instrument choice

Under the GGPPA, the Governor in Council is provided with the 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. Therefore, the Regulations, adding Alberta to Part 1 of Schedule 1 and Schedule 2 to the GGPPA, are the appropriate instrument choice.

Regulatory analysis

Costs and benefits

Not taking action on climate has costs. More frequent and extreme weather events due to climate change are already costing Canadians billions of dollars a year in insurance costs. Across the country, Canadians have experienced first-hand devastating wildfires, extreme flooding, severe droughts and stronger storms. Experts agree that putting a price on carbon pollution is the most effective and efficient way to cut climate change causing greenhouse gas emissions.

The Regulations will be administered and enforced as part of the fuel charge regime under Part 1 of the GGPPA. Adding Alberta to Part 1 of Schedule 1 and Schedule 2 to the GGPPA does not increase or decrease the legislative or regulatory requirements of the GGPPA, as 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 (which are generally medium or large-size businesses), small businesses are not expected to incur significant compliance costs due to the listing of Alberta in Part 1 of Schedule 1 and Schedule 2 to the GGPPA. However, to the extent that small businesses may incur compliance costs, those costs are derived from the GGPPA itself. 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 in Alberta, 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 in Alberta, which is an essential component of the Pan-Canadian Approach to Pricing Carbon Pollution. Carbon pollution pricing intends to reduce GHG emissions by encouraging behavioural changes and stimulating investments in low-carbon innovation. The federal backstop enables implementation of the Pan-Canadian Approach to Pricing Carbon Pollution and the extension of pollution pricing throughout Canada. A price on carbon pollution that meets the federal standard, when applied in all jurisdictions across Canada, 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 12

Gender-based analysis plus

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 gender-based analysis plus (GBA+) concluded that the application of the carbon pollution price can have disproportionate impacts on low-income and vulnerable populations. The Pan-Canadian Approach to Pricing Carbon Pollution neutralizes or mitigates these impacts by recycling 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 on behaviour changes to reduce GHG emissions and contribute to the Government’s climate change objectives.

Implementation, compliance and enforcement, and service standards

The Regulations will be 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