Integrating Ontario's carbon pollution pricing system for large industrial emitters with the federal fuel charge
December 3, 2021 - Ottawa, Ontario - Department of Finance Canada
The Government of Canada is committed to strong and effective climate action, including our price on pollution. Canada’s price on pollution gives Canadian businesses certainty about the future carbon price, providing a clear incentive to invest in the clean innovations that position Canada to be a leader in the global green transition.
Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announced the release of draft regulatory proposals under the Greenhouse Gas Pollution Pricing Act, that integrate Ontario’s Emissions Performance Standards (EPS) facilities with the federal fuel charge, for 2022. This allows Ontario’s EPS facilities to register as an emitter, allowing them to obtain fuel without the federal fuel charge applying, given they will be subject to the provincial system. Output-based pricing systems like Ontario’s or the federal government’s ensure that as we move towards a net-zero emissions economy, we are protecting the competitiveness of Canadian businesses and supporting good jobs.
Included with today’s announcement is the list of specific fuel charge rates for the provinces and territories where the federal pollution pricing system applies. These rates reflect the annual increase in the price on carbon pollution of $15 per tonne from 2023 to 2030 as announced in the government’s strengthened climate plan (a Healthy Environment and a Healthy Economy) and confirmed by the Minister of Environment and Climate Change.
Putting a price on carbon pollution is widely recognized as the most efficient means to reduce greenhouse gas emissions while also encouraging innovation and maintaining strong economic growth.
The Government of Canada has invested over $100 billion in climate action since 2015, including $53.6 billion in a green recovery and investments to accelerate the decarbonisation of heavy industry.
In September 2020, the federal Minister of Environment and Climate Change confirmed that Ontario’s EPS program – which was announced on February 21, 2019, and will come into force on January 1, 2022 – meets the federal government’s stringency requirements for large industrial emitters of carbon pollution. Accordingly, as of January 1, 2022, the province will no longer be subject to the federal “backstop” output-based carbon pollution pricing system.
Media may contact:
Office of the Deputy Prime Minister and Minister of Finance
Department of Finance Canada
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