Department of Finance Announcing Climate Action Incentive Payments and Launch of Fuel Charge Consultations

October 23, 2018 – Ottawa, Ontario – Department of Finance Canada

Carbon pollution is not free. Canadians see its effects when extreme weather threatens their safety, their health, their communities, and their livelihoods. They pay for it in the form of structural repairs and higher insurance premiums, food prices, health care costs and emergency services. Climate change is expected to cost Canada's economy $5 billion annually by 2020.

Canada needs to cut its greenhouse gas emissions, and the best way to do that is to put a price on carbon pollution.

Experts, including Nobel Prize winning economists, have made it clear that pollution pricing is the most effective and efficient way to reduce the greenhouse gas emissions that are giving rise to climate change.

Today, the Government of Canada announced the next steps in its climate change plan, including ensuring that there is a price on carbon pollution across Canada in 2019 and implementing a fuel charge in jurisdictions that do not have systems meeting a federal standard, or in those that voluntarily adopt it.

The Government also released details about how direct proceeds from carbon pollution pricing under the federal system would be returned to the province or territory of origin. These returns will be made in part through proposed Climate Action Incentive payments to residents of certain provinces.

Full details on Climate Action Incentive payments and the fuel charge are provided in the attached backgrounders.

In support of today's announcement, the Department of Finance has released a set of draft regulatory proposals under the Greenhouse Gas Pollution Pricing Act, listing jurisdictions in which the fuel charge applies and the rates at which it will apply.

The Department of Finance has also proposed additional fuel charge relief for greenhouse operators and power plant operators that generate electricity for remote (i.e., off-grid) communities (see below "Backgrounder: Targeted Relief for Farmers and Fishers, and Residents of Rural and Remote Communities"). Canadians are invited to provide comments on these additional proposals detailed below by November 23, 2018. Please send your comments to fin.tarification-pollution-pricing.fin@canada.ca. Written correspondence related to this consultation can also be mailed to:

Carbon Pollution Pricing
Department of Finance Canada
90 Elgin Street
Ottawa, Ontario
K1A 0G5