Next steps in pricing carbon pollution

A price on pollution is one of the most efficient tools we have to drive clean growth and cut carbon pollution. That’s why it’s a key part of Canada’s clean growth and climate plan.

We are working in partnership with provinces and territories to put a price on pollution across Canada, as announced by Prime Minister Trudeau in October 2016.

Many Canadian jurisdictions have shown real leadership on carbon pricing. Today, four out of every five Canadians live in jurisdictions that are already pricing carbon pollution, and every province has committed to adopting some form of carbon pricing.
In recognition of that provincial leadership, our approach to carbon pricing gives provinces and territories flexibility to choose which type of system to implement:

•  a direct pricing system, such as a carbon tax, like British Columbia has, or a carbon levy combined with a performance-based emissions system, as in Alberta, or
• a cap-and-trade system, as in Ontario and Quebec.

Ministers McKenna and Morneau have now confirmed the following carbon pricing timelines:

• Any jurisdictions wishing to adopt the federal approach should make that request by March 30, 2018. This would allow us to implement the federal approach in those jurisdictions in Fall 2018 with the federal standard price of $10 per tonne.
• By September 1, 2018, provinces and territories must confirm their plans to adopt carbon pricing systems that meet the federal standard.  The federal government will then assess each jurisdiction’s carbon pricing approach to determine whether it meets the standard.

If provinces and territories are not on track to adopt systems that meet our standard in 2018, the federal approach will go into effect in that jurisdiction, either in whole or in part on January 1, 2019 at the price of $20 per tonne. In the latter case, the federal approach would “top up” or strengthen an incomplete system.

The combination of existing carbon pricing systems, new carbon pricing systems, and the federal approach will ensure a price on pollution across Canada.