Government of Canada returning over $2.8 billion in fuel charge proceeds to Indigenous governments and small- and medium-sized businesses

On February 16, 2024, the government announced it is returning $872.4 million in 2024-25 fuel charge proceeds to Indigenous governments and small- and medium-sized businesses, and doubling the share of proceeds returned to Indigenous governments from 1 per cent to 2 per cent. The government intends to return 2 per cent of fuel charge proceeds to Indigenous governments in subsequent years.

Government of Canada returning over $2.8 billion in fuel charge proceeds to Indigenous governments and small- and medium-sized businesses

Since 2019, it is no longer free to pollute anywhere in Canada and provincial and territorial governments have been able to design and implement their own pollution pricing systems to meet a standard, federal benchmark. In provinces that have decided not to implement a system that meets the benchmark—specifically Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador—a federal backstop applies. All proceeds are returned to their province of origin—either through pollution pricing rebates, or through programs to Indigenous governments and small- and medium-sized businesses.

The Greenhouse Gas Pollution Pricing Act requires the federal government to return 100 per cent of net fuel charge proceeds to the jurisdiction of origin. Ninety per cent of proceeds are returned to households in backstop provinces through quarterly pollution pricing rebates, with eight out of ten households getting more money back than they pay, as a result of the federal pollution pricing system, with low- and middle-income families benefitting the most. The government is committed to returning remaining proceeds to Indigenous governments and small- and medium- sized businesses in jurisdictions where the federal fuel charge applies.

Returning fuel charge proceeds to Indigenous governments

Today, December 11, 2023, the Minister of Finance specifies the Minister of Environment and Climate Change as responsible for returning pollution pricing fuel charge proceeds to Indigenous governments. The Minister of Finance also specifies the period of 2020-21 through 2023-24 as the period in respect of which the fuel charge proceeds specified amounts may be disbursed, in keeping with her authority under the Budget Implementation Act, 2019, No. 1. These specifications contribute to fulfilling the government's commitment to return proceeds to impacted Indigenous Peoples.

This amounts to over $282 million that will be returned to Indigenous governments—including First Nations, Inuit, and Métis governments.

The table below sets out the specified amounts available to be returned to Indigenous governments, in each province where the federal fuel charge applies, through programming to be announced by Environment and Climate Change Canada (ECCC).

Table 1
Specified amounts to be returned to Indigenous governments by ECCC, by specified province1, 2
(2020-21 to 2023-24)

(in millions of $)
  2020-21 2021-22 2022-23 2023-24 Total
Alberta 11.7 16.9 21.0 26.4 76.0
Saskatchewan 3.3 4.6 5.8 7.2 20.9
Manitoba 2.6 3.7 4.7 5.9 16.9
Ontario 24.9 34.9 44.2 56.6 160.6
New Brunswick3 - - - 1.9 1.9
Nova Scotia3 - - - 3.2 3.2
Prince Edward Island3 - - - 0.49 0.49
Newfoundland and Labrador3 - - - 2.2 2.2

1 These amounts will be returned to Indigenous governments—including First Nations, Inuit, and Métis governments—in provinces and territories where the federal fuel charge applies.

2 In Nunavut and Yukon, all proceeds from the federal pollution pricing system are returned directly to the territorial governments.

3 As the Atlantic provinces joined the federal pollution pricing backstop in 2023, Indigenous governments in those provinces receive returns starting with the 2023-24 fuel charge year.

Returning fuel charge proceeds to small- and medium-sized businesses

On November 22, 2022, the Minister of Finance specified the Minister of Environment and Climate Change as the Minister responsible for providing federal programming to support small- and medium-sized enterprises in emission-intensive, trade-exposed sectors, by returning pollution pricing fuel charge proceeds. The Minister of Finance also specified the period of 2019-20 through 2023-24 as the period in respect of which the fuel charge proceeds amounts may be disbursed, in keeping with her authority under the Budget Implementation Act, 2019, No. 1.

This amounts to over $2.5 billion that will be returned to small- and medium-sized businesses.

The table below sets out the specified amounts available to be returned to small- and medium-sized businesses in provinces and territories where the federal fuel charge applies, through Environment and Climate Change Canada's (ECCC) Fuel Charge Proceeds Return Program.

The table below was updated on June 30, 2023, to include 2023-24 fuel charge proceeds to be returned to New Brunswick through programming supporting small and medium-sized enterprises.

Table 2
Amounts to be Returned to Small and Medium-Sized Enterprises through ECCC programming, by specified province1
(2019-20 to 2023-24)

(in millions of $)
  2019-202 2020-21 2021-22 2022-23 2023-24 Total
Alberta n/a 159.2 142.1 179.5 237.4 718.2
Saskatchewan 27.0 64.7 61.9 82.3 64.7 300.6
Manitoba 13.2 27.0 22.4 28.3 53.0 143.9
Ontario 81.4 205.9 239.7 299.9 509.3 1,336.2
New Brunswick3 n/a n/a n/a n/a 17.1 17.1
Nova Scotia3 n/a n/a n/a n/a 28.5 28.5
Prince Edward Island3 n/a n/a n/a n/a 4.4 4.4
Newfoundland and Labrador3 n/a n/a n/a n/a 20.1 20.1

1 In Nunavut and Yukon, all proceeds from the federal pollution pricing system are returned directly to the territorial governments.

2 Amounts for 2019-20 include the remaining 2019-20 proceeds that have not yet been disbursed through previous federal programming. All proceeds have been returned to Alberta.

3 As the Atlantic provinces joined the federal pollution pricing backstop in 2023, small- and medium-sized businesses in those provinces receive returns starting with the 2023-24 fuel charge year.

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