Government of Canada Announces Intent to Apply Pollution Pricing in Alberta
June 13, 2019 – Ottawa, Ontario – Department of Finance Canada
Canadians know that pollution is not free. There is a cost to farmers, homeowners, businesses and—most of all—to our children and grandchildren. To help make sure polluters pay, and to shift Canada towards a low-carbon future, the Government of Canada took action to make sure there is a price on carbon pollution across the country.
Today, the Government announced its intent to apply the federal pollution pricing fuel charge in Alberta, effective January 1, 2020, as a result of the province's May 30, 2019 repeal of its carbon levy.
By repealing its carbon levy, Alberta now only partially meets the federal benchmark requirements and will join the provinces of Ontario, New Brunswick, Manitoba and Saskatchewan in being covered by the federal fuel charge.
The direct proceeds from the federal fuel charge generated in Alberta will be returned to the province. The bulk of these proceeds will go directly to individuals and families in Alberta through tax-free Climate Action Incentive payments, starting in early 2020. The remainder will go to support other sectors, including small and medium-sized businesses, schools, hospitals, non-profits and Indigenous communities in the province.
Most households will receive more in Climate Action Incentive payments than they will pay in increased costs resulting from pollution pricing. Based on proposed Climate Action Incentive payment amounts, households in Alberta will receive $880 on average in early 2020 when they file their 2019 tax returns. This represents $126 for the first three months of the fuel charge (January-March 2020) plus $754 for the next 12 months (April 2020-March 2021). This second amount is greater than the estimated average cost impact per household of $610 for the corresponding 12-month period.
Climate Action Incentive payments encourage lower greenhouse gas (GHG) emissions without imposing a financial burden on households. As the pollution price itself encourages fewer GHG emissions, it will both protect the environment and promote green innovation. Additionally, particular groups and sectors—including farmers and fishers, and residents of remote communities—may receive additional relief to ensure a price on pollution is practical and effective for them.
The federal government will monitor any proposed changes to Alberta's large industrial emitter system, and will undertake another benchmark assessment once sufficient details about the new system for large emitters are available. The Government is also open to working with the Government of Alberta to determine the most appropriate treatment of small oil and gas facilities under the carbon-pricing regime.
"Since most households in Alberta will receive more in Climate Action Incentive payments than they will ever see in increased costs resulting from pollution pricing, they will be better off financially. And because Albertans are joining all other Canadians in helping to reduce the carbon pollution that causes climate change, their children and grandchildren will be better off as we lead the world to a more sustainable and prosperous global economy."
- The Honourable Bill Morneau, Minister of Finance
"Canadians know that climate change is real. They see its effects all around them. One of the most practical and affordable tools to fight man-made climate change is a price on carbon pollution. Despite the efforts of those who would deny this evidence, we are working with Canadians to take action to ensure it is no longer free to pollute anywhere in Canada."
- The Honourable Catherine McKenna, Minister of Environment and Climate Change
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 expenses. Across the country, Canadians have experienced first-hand devastating wildfires, extreme flooding, severe droughts and stronger storms.
Pricing carbon pollution has a proven record across Canada and internationally of reducing the carbon emissions that cause climate change while encouraging innovation and maintaining strong economic growth.
Last year, those provinces with a price on carbon pollution led the country in economic growth.
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Office of the Minister of Finance
Department of Finance Canada
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