Canada announces next steps to drive clean growth and climate action
June 28, 2019 – Ottawa, Ontario
Climate change is real and Canadians are feeling the impacts—from wildfires that choke the air with smoke, to devastating floods and deadly heatwaves. Canada is already warming at twice the global rate, and Canadians expect governments to act. The Government of Canada has a comprehensive climate plan that is cutting pollution and investing in the clean economy to create jobs and new economic opportunities for the middle class.
Fighting climate change is our greatest challenge—but it’s also a profound opportunity to make Canada’s economy stronger and more competitive. Global action on climate change will create a low-carbon economy worth an estimated $26 trillion over the next 10 years, and mobilize Canada’s skilled workers, engineers, businesses and entrepreneurs to develop and implement clean solutions and market them to the world.
Today, the Minister of Environment and Climate Change, Catherine McKenna, announced the next steps on measures to drive clean growth and climate action in Canada, including:
- Final regulations putting a price on pollution for industry. Under the Output-Based Pricing System (OBPS), industrial facilities that emit 50,000 tonnes or more per year pay a price on pollution starting at $20 a tonne this year, rising to $50 a tonne in 2022. To minimize competitiveness and carbon leakage risks for additional facilities in some sectors while maintaining the incentive to reduce their emissions, facilities emitting 10,000 tonnes or more in certain sectors can also apply to participate voluntarily in the OBPS. The standards announced today determine the portion of their emissions on which they will pay that price. These standards apply retroactively to January 1, 2019, in provinces where the system applies, and as of July 1, 2019, in Yukon and Nunavut.
- Canada’s regulatory approach for the Clean Fuel Standard. The federal government is seeking input on its proposed regulatory approach to the clean fuel standard, which would cut emissions from fuels used in Canada by 30 million tonnes a year by 2030. The proposed regulations for liquid fuels are expected to be published in Canada Gazette Part I in early 2020, and come into force in 2022. The government intends to bring liquid class regulations into force in 2022 and the gaseous and solid classes in 2023.
- The proposed approach to developing a federal offset system. A federal offset system creates market opportunities for small businesses as well as sectors such as agriculture, waste and forestry to provide climate solutions, while offering industry more flexibility and a range of cost-effective options to meet the requirements of the industrial price on carbon pollution.
- A discussion paper on how to return the direct proceeds from the federal price on pollution for industry (OBPS). Under the federal system, all direct proceeds from pricing carbon pollution will be invested in the province or territory they came from. The discussion paper invites comment on how best to re-invest the proceeds from the federal price on pollution for industry.
The new elements announced today are part of Canada’s comprehensive plan for climate action and clean growth. Along with more than 50 other measures in Canada’s climate plan, the regulations and policies announced today will help reduce carbon pollution, protect competitiveness, spur innovation, and grow the economy.
In the 21st century, protecting the environment and growing the economy must go hand in hand. By taking action, Canada is building a safer and more prosperous future for our children and grandchildren.
“The science behind climate change is clear. Our government is taking action with a comprehensive, affordable, and effective climate plan that is reducing pollution and growing the economy. Canada’s biggest polluters must be part of the solution, and the steps we’re taking today will help provide certainty about what’s expected, while encouraging innovation and protecting competitiveness. With Canada’s climate plan, we’re helping Canadian companies be among the leaders in a global economy where clean solutions are in demand.”
– Catherine McKenna, Minister of Environment and Climate Change
According to the Global Commission on the Economy and Climate, the clean economy is expected to grow to $26 trillion and create 65 million jobs worldwide by 2030. Recent analysis by Clean Energy Canada and Navius Research found that clean energy jobs in Canada are growing 60 per cent faster than the Canadian average.
The federal price on pollution puts a price on 69 per cent of all greenhouse gas emissions in the jurisdictions where the federal system applies. The price on pollution for industry covers 27 per cent of those emissions, while the fuel charge, which applies to fossil fuels used in the rest of the economy, covers 42 per cent of those emissions.
In 2016, the federal government worked with provinces and territories and engaged Indigenous peoples to adopt Canada’s national climate plan, the Pan-Canadian Framework on Clean Growth and Climate Change. The plan contains over 50 specific measures to reduce carbon pollution, help Canadians adapt and become more resilient to the impacts of a changing climate, foster clean technology solutions, and create good jobs that contribute to a stronger economy.
Canada’s OBPS puts a price on carbon pollution for industries while maintaining competitiveness. The OBPS is designed so that the least efficient facilities pay on more of their emissions, the top performers are rewarded, and all facilities have an incentive to cut carbon pollution and support clean innovation.
Most carbon pollution pricing systems have a version of this approach to pricing industrial greenhouse gas emissions. Similar systems are implemented in Canada, including in Quebec, Alberta, Saskatchewan, Nova Scotia and Newfoundland and Labrador, and one is under development in British Columbia. Internationally, similar policies are in place in California and the European Union.
The federal Output-Based Pricing System applies today in Prince Edward Island, New Brunswick, Ontario, Manitoba, and partially in Saskatchewan, and will soon apply in Yukon and Nunavut. These are the jurisdictions that either agreed to accept the federal carbon pollution pricing system or did not develop one that met the federal benchmark stringency requirements.
Office of the Minister of Environment and Climate Change
Environment and Climate Change Canada
819-938-3338 or 1-844-836-7799 (toll-free)
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