Climate change/greenhouse gas: appearance before the Standing Committee
Climate change (National)
Q. How is Canada’s climate changing?
- Canada’s Changing Climate Report was released by the Department in April 2019 and is one of the most well received and highly publicized reports on climate change in Canada. The report has also been informing policy across the Government.
- The report confirms that warming in Canada has been double the global rate, with even faster rates of warming in the Arctic. Much of this warming is irreversible.
- This rapid warming is causing climate change impacts across the country, with seasonal and regional variability.
- This includes more frequent wildfires, greater precipitation, thawing permafrost, extreme weather, rising sea levels, and changing freshwater availability.
- In the past three years alone, Canada has experienced record-breaking floods and wildfires and we expect to see this trend continue in the years to come.
- In turn, these impact human health and well-being, infrastructure, the environment, and all sectors of the economy.
Q. How is the Government supporting climate change adaptation?
- Adaptation in Canada is a shared responsibility, with action happening at the federal, provincial and territorial levels, as well as collaboration with Indigenous Peoples, industry, and individuals.
- ECCC coordinates the federal approach to climate change adaptation and building resilience to climate impacts.
- Federal action is primarily focused on the generation and dissemination of foundational climate knowledge, building the capacity of Canadians to adapt to climate change, and helping finance adaptation projects in communities.
- This includes the launch of the Canadian Centre for Climate Services, which provides data, guidance and resources for Canadians to better understand how the climate is changing and how to use this knowledge for making climate-smart decisions when planning for the future.
- Achievements also include the $2-billion Disaster Mitigation and Adaptation Fund to support infrastructure projects to help communities manage the risks of natural disasters and climate change.
Q. How does the government work with provinces and territories to ensure the federation is heading in the same direction when developing and implementing actions?
- Under our constitution, jurisdiction for environmental protection, including climate change, is shared between the federal, provincial and territorial (FPT) governments.
- The PCF is the first climate plan in Canada’s history to include individual and joint commitments by federal, provincial and territorial governments. It builds on the considerable leadership and actions taken individually and collectively by Canada’s provinces and territories.
- The federal government continues to work closely with provincial and territorial governments to implement more than 50 concrete measures under the PCF.
- As well, several governance and reporting mechanisms exist to ensure ongoing collaboration across federal, provincial and territorial governments to track progress in implementing measures under the PCF and to identify opportunities for further action.
- The Canadian Council of Ministers of the Environment (CCME) is the primary ministerial FPT coordinating body established to facilitate cooperation on environmental issues, including climate change.
- The CCME along with eight other FPT Ministerial tables have committed to reporting on progress on the status of implementation of PCF actions within their portfolio (including energy, infrastructure, transport, forestry, agriculture, innovation, emergency management and finance).
- These institutional arrangements help us ensure that the federation is headed in the same direction.
Q. How do climate actions take into account the needs of Indigenous communities? On reserve? North of 60? Remote communities?
- Federal departments that deliver PCF programs engage directly with Indigenous peoples, and also with national Indigenous organizations and regional representatives through three distinctions-based tables.
- Individual departments engage directly with target audiences, including Indigenous communities for their PCF-related programs – either through community visits, or engagement with local, regional, or national Indigenous organizations.
- Additionally, through the three distinctions-based tables, federal departments and agencies engage directly with national Indigenous organizations, representative regional Indigenous members, and specifically with Métis and Inuit – Rights holding organizations.
- These dialogues are helpful to identify the specific needs and concerns of Indigenous peoples, including those that live in the North and in other remote communities.
- Through this engagement, some federal programs and policies have already been modified to better meet the needs of Indigenous peoples. Examples include:
- Under the federal carbon pricing backstop, fuel charge relief for aviation fuels in the territories.
- NRCan introduced modifications to its Clean Energy for Rural and Remote Communities program to better support capacity building at the local level.
Q. Are Indigenous Peoples co-developing Canada’s climate actions and targets?
- The federal government is committed to working with Indigenous peoples to tackle climate change and embrace clean growth. The three distinctions-based tables are mechanisms that can be used to shape climate actions that are in keeping with the unique circumstances of Indigenous peoples.
- Internationally, Canada is proud to have championed the launch of the Local Communities and Indigenous Peoples Platform, and its governing body, the Facilitative Working Group (FWG), under the UNFCCC. The Platform provides an opportunity to enhance the rightful voices of Indigenous peoples in international climate change discussions and to bring Parties and Indigenous peoples together to share knowledge and exchange views to inform the work of the UNFCCC more broadly.
- The Government of Canada looks forward to its continued close cooperation with First Nations, Métis Nation, and Inuit representatives in international climate change negotiations, including at the upcoming 26th Conference of Parties.
Greehouse gas trends
Q. Does the Government of Canada plan to bring forward a more ambitious 2030 target to COP26? If so, how will you engage on the new target?
- The Government is committed to meeting and exceeding Canada’s 2030 greenhouse gas (GHG) emissions reduction target of 30% below 2005 level, and establishing plan to achieve a prosperous net zero emissions future by 2050.
- Meeting and exceeding our 2030 target will be hard, but Canada has made tremendous progress since 2015 with projected emissions trending downwards.
- To ensure progress continues, the Government will be implementing new measures, as identified through Ministerial Mandate Letters, such as helping Canadians retrofit their homes and commercial buildings, launching the Clean Power Fund to accelate the electrification of milles, mines and factories, investing more in public transit and adding 5,000 charging stations for zero emission vehicles, and planning over 2 billion trees over ten years.
- The Government will also explore opportunities to strengthen existing measures and identify additional measures to meet and exceed Canada’s 2030 target.
If pressed on a new NDC:
- The Government of Canada is focussed on meeting and exceeding Canada’s 2030 target, which includes updating the federal climate plan to include new measures.
- Decisions on an updated NDC has not yet been taken.
Q. How can the Government of Canada meet and exceed the Paris Agreement targets when the 4th Biennial Report shows a 77Mt gap?
- Canada’s Fourth Biennial Report on Climate Change demonstrates that the government has made strong progress in implementing Canada’s national climate plan, the Pan-Canadian Framework. Canada’s climate plan was just the beginning. We recognize that more action will be needed to meet its ambitious goal and go further.
- The Report does not account for all measures that are in place or that have been announced. It is a conservative accounting only of measures that can be modelled with a reasonable degree of accuracy.
- In particular, estimates do not include full reductions from investment in clean technology, innovation and public transit.
- Recognizing that more reductions are needed, in December 2019, the Government of Canada announced a commitment to strengthen existing and introduce new greenhouse gas reducing measures to exceed Canada’s 2030 emissions reduction goal and begin work so that Canada can achieve net-zero emissions by 2050.
- Additional actions include support for clean electricity generation, greener buildings and communities, electrification of transportation, and nature-based climate solutions (including a commitment to plant 2 billion trees over the next 10 years).
- At the time of completing projections for the 4th Biennial report, these commitments – highlighted during the Speech from the Throne and Ministers mandate letters (Dec 2019) – were not available. As more details become available and these initiatives begin to be implemented, they will be included in Canada’s emissions modelling to provide a better understanding of future projected emissions levels.
- These measures, and more to come, will help put Canada on a path to deeper emissions reduction that is sensitive to the needs of the country, grows the economy, and makes life more affordable.
- We are hopeful that provincial and territorial measures advance as well. Provinces and territories have a key role to play.
- The federal government will look to the advice of experts and consultations with Canadians to ensure the path to net-zero is sensitive to the needs of our country, grows the economy and makes life more affordable.
Q. How much would Canada’s GHG emissions be reduced by planting 2 billion trees?
- The estimated contribution of the land sector does not yet include the impact of planting 2 billion trees. GHG reductions will depend on the surface afforested, the type of trees planted and the years in which the tree planting activities will take place.
Q. How does the Government of Canada model its emissions projections?
- The approach to developing Canada’s GHG projections involves using the most up-to-date statistics on GHG emissions and energy use, and sourcing key assumptions from the best available expert sources, that includes:
- Historical GHG emissions are aligned to Canada’s latest National Inventory of GHG Emissions.
- Canada Energy Regulator (CER) information on future energy prices and large-scale energy projects
- Economic projections (including GDP, exchange rates and inflation) from Finance Canada
- The scenarios are developed using E3MC, a detailed, proven energy, emissions and economy model for Canada.
Q. What economic modeling capacity exists within ECCC?
- ECCC uses a suite of models to develop projections of energy and emissions and conduct policy analysis. Different models are used for different projects, often used in complementary ways.
- For example a technology rich simulation model linked to a macroeconomic model is used to develop the GHG and air pollutant emissions projections underlying Canada’s National Communication and Biennial Reports to the UNFCCC and Canada’s Emissions Trends reports as well as for analysis to support the domestic climate change agenda.
- A multi-sector, multi-region computable general equilibrium model is used to support the domestic and international energy and environment policy agenda, including carbon pricing.
- An integrated assessment model that links society drivers and the economy with earth systems climate models into a single framework is used to support longer term policy issues such as the Mid-Century Strategy on Climate Change and to explore the implications of 1.5 and 2°C emission pathways and technology issues related to the transition to a low carbon economy.
- All models are parameterized with inputs from credible sources such as Finance Canada, Statistics Canada and the Canadian Energy Regulator. The internationally-focused suite of models use data from sources such as the International Energy Agency, U.S. Informational Agency, the United Nations Framework Convention on Climate Change and the Global Trade Analysis Program.
- In developing our modeling parameters, including our emissions projections we consult with provincial and territorial officials. We also consult with our international modeling partners.
- The suite of ECCC models undergo peer review either directly, as was the case with ENERGY 2020 or indirectly when research is published in academic journals. The GCAM model has been peer reviewed through the Intergovernmental Process on Climate Change.
- My officials would be available to provide you with greater technical details on the ECCC suite of models.
Q. What are the latest levels of GHG emissions from Canada (by sectors and provinces)? What are their trends since 2005 levels?
- In Canada’s most recent report to the United Nations Framework Convention on Climate Change – the 4th Biennial Report – show a widespread decline in projected emissions across the economy. Canada’s latest levels of GHG emissions. In 2017, Canada’s GHG emissions are 716 Mt, a decrease of 15Mt since 2005. Canada’s GHG emissions are projected to be 588 megatonnes of carbon dioxide in 2030, which is 227 megatonnes lower than before implementing the Plan in 2015. This is a historic level of emissions reductions.
- The Oil and Gas and Transportation sectors are responsible for the majority of GHG emissions, contributing 195 Mt (27%) and 174 Mt (24%), respectively. Buildings, Electricity, Heavy Industry and Agriculture also play a significant role, contributing 85 Mt (12%), 74 Mt (10%), 73 Mt (10%) and 72 Mt (10%), respectively. Waste and other sectors contributed 42 Mt (6%).
- Emissions vary considerably by province, driven by diversity in population size, economic activities, and resource base, among other factors. For example, provinces where the economy is oriented more toward resource extraction tend to have higher emissions levels whereas more manufacturing or service-based economies tend to have lower emissions levels. Electricity generation sources also vary, with provinces that rely on fossil fuels for their electricity generation having higher emissions than provinces that rely more on non-emitting sources of electricity, e.g. hydroelectricity, nuclear, wind and solar.
- Over the 2005 to 2017 period, Canada’s total GHG emissions decreased by 15 Mt or 2%. The Energy Sector dominated this trend, with emission decreases of 15 Mt (4%) in Stationary Combustion Sources and 5 Mt (9%) in Fugitive Sources. Over the same period, emissions also decreased by 1.8 Mt (3%) in the IPPU Sector and 1.4 Mt (7%) in the Waste Sector. However, emissions from Transport increased by 9.0 Mt (5%) partially offsetting the decreases from the other sectors.
Impacts of climate change
Q. What is the magnitude of climate change impacts globally and in Canada?
- The science is clear -- we cannot wait for future generations to stop polluting, or to take steps to adapt to the impacts of climate change. We need to act now. According to the Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming of 1.5°C:
- human activities have already caused approximately 1.0°C of average global warming;
- warming of about two to three times higher than the global average has occurred in the Arctic;
- global warming is likely to reach 1.5°C within the next 10-30 years if temperature continues to increase at the current rate.
- Global emissions must reach carbon neutrality by 2050 to limit warming to 1.5°C, as identified in the Paris Agreement. The Government of Canada recognizes these findings and agrees that more work is needed.
- There is a substantial difference in impacts between a 1.5 degree world and a 2 degree world on all fronts (e.g. temperature, precipitation, sea-level rise, ecosystems and biodiversity, human health, security, economic growth), with a 1.5 degree world being preferable and leaving us more options to adapt.
- Canadians are already being impacted by the changing climate. Canada’s climate is warming twice as fast as the rest of the world, and three times as fast in the north. The effects of warming are already evident in many parts of Canada and are projected to intensify in the near future.
Q. What is the Government of Canada doing to ensure there is a smooth transition to a cleaner, more sustainable economy and that it does not leave workers and communities behind (i.e. oil and gas, mining)?
- Achieving Canada’s climate change goals will require nothing short of a transformation of the Canadian economy, with corresponding impacts on and opportunities for Canadian workers.
- In early 2018, Canada launched the Task Force on the Just Transition for Canadian Coal Power Workers and Communities, to identify how to make the transition away from coal-powered electricity fair for affected workers and communities. In response to the Task Force’s final report, Budget 2019 dedicated $150 million to create an infrastructure fund and has already launched a separate $35 million fund to support skills development and economic diversification in Canada’s coal regions, including creating local transition centres.
- The Government of Canada is committed to advance legislation to support the future and livelihood of workers and their communities in the transition to a low-carbon global economy.
- Clean technology development, commercialization, and adoption across all industrial sectors is a key pillar in the transition to a decarbonised economy. The Government of Canada has invested more than $3B since Budget 2016 to drive progress in clean technology and the growth of Canadian firms and exports.
Q. What incentives is the government providing to vulnerable populations, Indigenous communities, small businesses, consumers, to make costs associated with transition to a low carbon economy more affordable?
- The Government of Canada delivers a host of programs related to Pan- Canadian Framework implementation: 10 are specific to Indigenous peoples (e.g., CIRNAC’s First Nations Adapt). The purpose of these programs is to help Indigenous communities build capacity and implement adaptation, mitigation, and clean growth action to support their participation in a low carbon economy.
- Of note, ECCC manages the $2-billion Low Carbon Economy Fund that supports implementation of the Pan-Canadian Framework by leveraging investments in projects that will generate clean growth, reduce greenhouse gas emissions and help meet or exceed Canada's Paris Agreement commitments. This Fund provides $1.4 billion to provinces and territories that have adopted the Framework; over $500M is available for the Low Carbon Economy Challenge.
- The Challenge Fund is further divided into the $450-million Champions stream (open to provinces and territories, municipalities, Indigenous communities and organizations, businesses and not-for-profit organizations). The $50-million Partnerships stream is set to launch early in 2019 and is geared specifically to Indigenous communities and organizations, small and medium-sized businesses, not-for-profit organizations and small municipalities.
- Other examples of government programs to support Pan-Canadian Framework initiatives in small communities, and rural and remote areas:
- Clean Energy for Rural and Remote Communities $220M over 6 years
- Arctic Energy Fund $400M over 10 years
- Northern REACHE $53.5M over 10 years
- Canadian Agricultural Partnership $3B ($686.5M over 5 for AgriScience and AgriInnovate pillars)
- Indigenous Community-Based Climate Monitoring $31.4M over 5 years (and $6.8M ongoing)
- Disaster Mitigation and Adaptation Fund $2 billion
- The Task Force on the Just Transition for Canadian Coal-Power Workers and Communities was established to provide the federal government with expert advice on how to assist with the transition away from coal-fired power in Canada, and how to best support coal workers and communities in a successful transition.
- In addition, all direct proceeds from the federal approach to carbon pollution pricing will be returned to the jurisdiction of origin. These revenues could help businesses and households invest in energy efficiency, build transit and other infrastructure, and offset costs incurred by low-income households or other vulnerable groups.
Q. What is the Government of Canada doing to put Canada on the path to net-zero by 2050?
- Since 2016, the Government of Canada has been working with provinces, territories, and Indigenous Peoples, to implement the Pan-Canadian Framework on Clean Growth and Climate Change. This plan outlines over 50 concrete measures to reduce carbon pollution, help us adapt and become more resilient to the impacts of a changing climate, spur clean technology solutions, and create good jobs that contribute to a stronger economy.
- The Pan-Canadian Framework on Clean Growth and Climate Change provides a foundation and positions Canada on a path to meet its 2030 targets and achieve net zero by 2050. The Government of Canada will continue to implement our climate plan, while strengthening existing and introducing new climate action to exceed Canada’s 2030 emission reduction target.
- The federal government will look to the advice of experts and consultations with Canadians to ensure the path to net-zero is sensitive to the needs of our country, grows the economy and makes life more affordable.
- The Government of Canada will set legally-binding, five-year emissions-reduction milestones based on the advice of experts and consultations with Canadians, and newly released mandate letters introduce multiple new measures.
Q. Has the Government of Canada modelled the costs of getting to net-zero by 2050?
- Inaction would be more expensive than climate action. The costs of climate change in Canada could escalate from an estimated $5 billion per year in 2020, to between $21 billion and $43 billion per year by 2050.
- The Government of Canada has and will continue to analyze the economic benefits and costs of the full set of measures in the Pan-Canadian Framework, as well as its environmental and social benefits. We are committed to transparency regarding the assumptions, benefits and costs of this analysis.
- Each proposed regulatory measure and its supporting analysis will be published for public comment in the Canada Gazette, Part I, before being finalized.
- The direct cost of the actions in the Pan-Canadian Framework is projected to be modest, particularly in comparison to the projected benefits.
- There are many potential pathways to net zero. More clarity will be available on costs and benefits of pursuing various pathways once extensive engagement and analysis work has been completed.
- The Government has analysed the economic impacts of the Pan-Canadian Framework using ECCC’s peer reviewed, multi-region, multi-sector, provincial- territorial based computable general equilibrium CGE model. The model is extensively used to support policy development within ECCC.
Q. The Government has commited to reaching a net-zero target by 2050. What is “net-zero” and how is it defined.
- Climate experts say achieving net-zero emissions by 2050 means countries either emit no greenhouse gas emissions at all or offset them completely through actions that remove carbon dioxide and other climate warming gases from the atmosphere.
- In the months ahead, the Government of Canada will seek the advice of experts and will consult with Canadians to identify pathways to net-zero that will grow the economy, while also making life more affordable.
- The Government of Canada will bring forward new and enhanced measures to ensure Canada will exceed its 2030 emissions target, providing a foundation for net-zero.
Q. What does net zero mean for the oil sands? (For LNG? For fracking?)
- Net-zero does not mean shutting down Canada’s oil and gas sector, but rather developing Canada’s natural resources in cleaner, more sustainable ways.
- The Government of Canada will continue to ensure this sector remains competitive.
- Several of Canada’s largest energy companies are already planning for a net- zero future.
- Canadian Natural Resources, one of Canada’s biggest oil and gas producers, is aiming for net zero emissions in the oil sands through technology improvements, R&D investment, and Carbon Capture and Storage (CCS) projects.
- Shell aims to halve the carbon footprint of its products by 2050.
- Cenovus and Repsol both aim for net-zero emissions by 2050.
- There are existing and emerging technologies that will be crucial for accelerating progress to decouple emissions from economic growth.
Strategic assessment of climate change
Q. What is the Strategic Assessment of Climate Change?
- The strategic assessment of climate change provides guidance on how federal impact assessments will consider a project’s greenhouse gas emissions and its resilience to climate change impacts. This will enable consistent, predictable, efficient and transparent consideration of climate change in the impact assessment process.
Q. What is the status of the Strategic Assessment of Climate Change?
- In August 2019, a draft SACC was published for public comments. The draft SACC provides interim guidance until the final assessment is published. It is anticipated that the final will be published in 2020.
Q. When do you plan to introduce legislation, a new climate plan, a new target and a net zero plan?
- Our goal is to:
- Launch an engagement and analysis process in the coming months to help inform pathways to net zero.
- The timeframe for draft legislation is not yet definitively decided [*Redacted*].
International Climate Change
Q. Why are you providing funding to other countries for climate action, when Canada is not on track to meet its own Paris Agreement targets?
- Climate change is a global issue, requiring global solutions. Our contribution demonstrates our commitment to action and recognizes that without appropriate support for developing countries, particularly the poorest and most vulnerable, our collective success in meeting Paris targets is at risk.
- Canada recognizes the need for global climate financing to continue after 2020 and is committed to providing leadership and working with its international partners.
- Canada is committed to supporting developing countries in their transition to low-carbon and climate-resilient economies. We are delivering $2.65 billion by 2020-2021 and working with a wide range of partners, including philanthropists and institutional investors, to leverage funding. Projects are helping developing countries around the world reduce their greenhouse gas emissions, be better equipped to adapt to the effects of climate change, and transition to low-carbon economies.
Responsive on China:
- Since its inception in 1992, Canada has been funding the China Council on International Cooperation on Environment and Development (China Council), an advisory body that provides policy recommendations to the Chinese government. Over the years, China has implemented many of these policy recommendations, leading to improved environmental measures. For example, Chinese officials have informed us that China Council recommendations have contributed significantly to China’s recently announced measures to tackle plastic pollution.
Q. Does Canada plan to take credit for the global impact of its LNG/iron/uranium production?
- The Government of Canada is focused on implementating domestic initiatives to meet our Paris commitments and no decision has been made regarding the use of Internationally Transferred Mitigation Outcomes (ITMOs).
- We continue to seek guidance on how ITMOs would work under Article 6 and hope to conclude the rules at COP26.
- In the meantime, we will continue discussions with Canadians on the potential of ITMOs and how they can help reduce global emissions.
- Any trading of ITMOs must ensure environmental integrity and transparency, including no double-counting of credits. Countries engaging in ITMOs must also authorize the transfers.
- As we look at different scenarios, we need to keep in mind that countries looking to reduce their own emissions may be reluctant to give away credits to other countries.
Q. How are you ensuring that free trade agreements are supporting climate action?
- Canada is firmly committed to the principle that trade and environmental protection are mutually supportive.
- As part of its free trade agreements (FTAs), Canada includes comprehensive environment provisions that seek to ensure trading partners maintain high levels of environmental protection and do not lower those levels of protection as trade and investment are liberalized. Canada’s FTAs also include binding obligations for parties to effectively enforce their environmental laws and not weaken such laws to attract trade or investment. This would include domestic laws and other measures parties take to address climate change.
- Canada also seeks to advance commitments to address global environmental issues such as climate change, and related issues such as air quality, sustainable forest management, and environmental goods and services. We also seek provisions reaffirming Parties’ commitments under multilateral environmental agreements, which would include the United Nations Framework Convention on Climate Change and the Paris Agreement.
- Canada’s FTAs include a comprehensive framework for cooperation with trading partners in areas of mutual interest, which for Canada would include climate change as a key priority area.
February 2020 PBO report on pollution pricing
Q. The PBO Report that was released earlier this month (Feb 2020) estimates that the government will rake in close to $100M in GST by charging a tax on the carbon tax, can the department comment on the report?
- I am not in a position to comment on the specifics of the Feb. 2020 PBO report in detail, however the report confirms that, in ON, SK, NB, MB where the federal system applies, most households will receive more in Climate Action Incentive payments than the amount they pay due to carbon pricing – i.e. they come out ahead.
- It also finds that this is progressive, insofar as the lowest income households face lower carbon costs, and therefore receive the greatest net benefit from the return of proceeds.
Impact on farmers
Q. What is the Government doing to help farmers with carbon pricing?
- We recognize the wet conditions have resulted in a difficult 2019 harvest, and the cost impact on farmers.
- The federal pollution pricing system is designed to minimize cost impacts on farmers and create economic opportunities, for example through carbon offsets.
- Farmers are receiving targeted relief under Canada’s climate plan. For example, the price on carbon pollution does not apply to gasoline and diesel used in tractors, trucks, and other farm machinery.
- The Government, including AAFC, is continuing to work to find solutions that address the cost impacts of extreme weather events for farmers.
Q. Why give (fishers/farmers/greenhouse operators) relief from the fuel charge? Why not other businesses?
- Under the Greenhouse Gas Pollution Pricing Act (GGPPA), farmers/fishers/greenhouse operators are provided relief from the fuel charge, when certain conditions are met.
- For example, relief for farmers and fishers applies to gasoline and light fuel oil used in eligible activities, such as operating a tractor on their farm or operating a fishing vessel.
- Other provinces that have implemented their own pollution pricing system have provided similar relief. For example, British Columbia offers relief to farmers and certain commercial greenhouse operators.
Q. What is the government’s position on the constitutionality of the Greenhouse Gas Pollution Pricing Act?
- We are confident that the Greenhouse Gas Pollution Pricing Act is constitutionally valid.
Q. This is just another government tax grab, isn’t it?
- The federal carbon pollution pricing backstop is not about raising revenues for the Government of Canada. All direct proceeds from pricing carbon pollution under the federal system are being returned to the jurisdiction in which they were collected.
- Provincial and territorial governments that have committed to addressing climate change by voluntarily adopting the federal system receive these proceeds directly from the federal government and can decide on how to use them.
- For provinces that have not committed to pricing carbon pollution (Ontario, Alberta, Manitoba, and Saskatchewan), the federal government is returning the majority of direct proceeds from the regulatory charge on fuel, in the form of Climate Action Incentive payments, directly to individuals and families in the province of origin.
- This amount will include a 10 per cent supplement for residents of small communities and rural areas, in recognition of their specific needs.
- Those direct proceeds from the federal regulatory charge on fuel, which are not returned directly to individuals and families through Climate Action Incentive payments, will be earmarked to provide support to schools, hospitals, small and medium-sized businesses, colleges and universities, municipalities, not-for-profits, and Indigenous communities in the province.
- The objective will be to support eligible recipients by encouraging them to adopt clean technologies that will help to reduce energy usage and achieve cost savings, while reducing GHG emissions.
Pollution pricing post 2022
Q. Does the Government intend to increase the carbon tax? When will it do this and by how much?
- This is a question about future government policy decision.
- The pan-Canadian approach on pricing carbon pollution, published in October 2016 sets out the carbon pollution price trajectory for direct pricing systems out to 2022 – starting at $20/t in 2019, rising $10/year to $50/t in 2022.
- The price trajectory post-2022 is still to be determined.
- Under the PCF, First Mins. committed to reviewing carbon pollution pricing across Canada in 2022.
Q. Has the department completed any analysis on the price trajectory?
- This is a question about future government policy decision.
- The price trajectory post-2022 is still to be determined. As for all policies, there is ongoing analysis of a wide range of options and tools to reduce emissions.
- As set out in the PCF, First Ministers committed to reviewing carbon pollution pricing across Canada in 2022.
Q. But how is this fuel charge not a “tax”?
- The federal carbon pollution pricing backstop is not about raising revenues for the Government of Canada.
- It is about putting in place a regulatory scheme that puts a price on products that are more polluting, and at the same time, returning the proceeds to households and communities so they can make cleaner and more environmentally sustainable spending choices.
- A price on carbon pollution will lead investment and consumption towards more sustainable alternatives.
Q. How does putting a price on carbon pollution work to reduce emissions?
- Carbon pricing reduces greenhouse gas emissions by making polluting activities more expensive. As the price of fossil fuels rises, individuals and businesses will take actions that help them use less of those fuels in order to save money.
- A well-designed price on carbon pollution provides an incentive for climate action and clean innovation while protecting business competitiveness. It is efficient and cost effective because it allows businesses and households to decide for themselves how best to reduce emissions.
Q. How much will the federal and provincial carbon pricing systems reduce emissions?
- Carbon pollution pricing will make a significant contribution toward meeting Canada’s 2030 greenhouse gas reduction target.
- Environment and Climate Change Canada has estimated that the federal, provincial and territorial carbon pricing systems currently in place across Canada will reduce GHG emissions by a significant amount.
- In 2020, emissions reductions of 33 to 37 Mt are expected.
- In 2030, emissions reductions are expected to increase to 61 to 85 Mt.
- These are scenarios only. Emission reductions may vary depending on how carbon pollution pricing proceeds are used and the carbon price trajectory post-2022.
Q. How does Alberta’s climate plan compare with the federal carbon pollution pricing system?
- The coverage of the federal fuel charge is broadly similar to that of the previous Alberta carbon levy. It generally applies to the same types of fossil fuels.
- The federal fuel charge took effect in Alberta as of January 1, 2020 at $20 per tonne of greenhouse gas emissions (CO2e). It will increase to $30 per tonne of emissions on April 1, 2020, in line with other jurisdictions where it applies.
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