New Brunswick and pollution pricing

Protecting the environment and growing the economy go together. In 2016, the federal government worked with provinces, territories, and with input from Indigenous peoples, on Canada’s first comprehensive climate action plan, which includes a fair, stringent and efficient price on carbon pollution.

As part of Canada’s plan, provinces and territories had the flexibility to maintain or develop a carbon pollution pricing system that works for their circumstances, provided it meets the federal standard. The Government of Canada worked with provinces and territories on this plan for over two years.

New Brunswick’s proposed carbon pollution pricing system does not meet the federal benchmark stringency requirements. Therefore, the federal carbon pollution pricing system will apply in the province.

Federal system highlights

The federal pollution pricing system will be implemented in New Brunswick under the federal Greenhouse Gas Pollution Pricing Act with the following features:

Use of proceeds

The Government of Canada has committed to return all direct proceeds collected in New Brunswick under the federal carbon pollution pricing backstop system, through direct payments to families and investments to reduce emissions, save money and create jobs. In New Brunswick, we will return the proceeds as follows:

How the CCR will be calculated – a New Brunswick family of four will receive $256 in 2019

Under the proposed approach, individuals in New Brunswick will receive a tax-free CCR after filing their 2018 tax return starting in early 2019. The CCR in New Brunswick will be calculated as follows for 2019:

Under this proposal a New Brunswick family of four will receive $256 in 2019. The average household in New Brunswick will receive $248, taking into account the various family sizes and circumstances.

Family of four

William and Jenna, who have two young children, live in Saint John. They have decided that William will be the parent claiming the CCR for their family when he files his 2018 tax return in early 2019. He will claim $128 for himself, $64 for Jenna and $32 for each child, for a total amount of $256. He will see this full amount when his tax return is assessed.

Supplement for residents of small and rural communities

To further support small and rural community residents in New Brunswick, the Government proposes to provide a supplementary Canada Carbon Rebate amount for people who live in small and rural communities in recognition of their increased energy needs and reduced access to energy-efficient transportation options. This supplement will be an additional 10 per cent of the payment amount to which they are entitled. Small and rural communities will be defined as anywhere outside of a census metropolitan area (CMA), as defined by Statistics Canada.Footnote 2

Delivery of payments

Under the proposal, individuals will claim the CCR on their tax return. This will involve filling out a short schedule identifying the number of adults and children in the family unit for which payments would be claimed. There will be one claim per family.

The provision of the CCR through the Canada Revenue Agency will ensure timely, accurate, and cost-efficient delivery.

Single parent with two children eligible for rural supplement

Brigitte is a single mother who lives in Plaster Rock, New Brunswick with her twelve-year-old daughter and eight-year-old son. Under the proposed CCR, Brigitte will claim $128 for herself, $64 for her daughter and $32 for her son when she files her 2018 tax return in early 2019, for a total CCR of $224. Given that the family lives in a small and rural community, Brigitte will indicate on her tax return that her family qualifies for the small and rural community supplement, meaning that her payment will be boosted by 10 per cent. As a result, Brigitte will see an amount of $246 when her tax return is assessed.

Impact on individuals and families

The CCR enables the Government to encourage lower greenhouse gas (GHG) emissions without imposing a financial burden on households. The federal backstop system helps the environment and the economy because it puts a price on pollution and supports cleaner alternatives. Most households in New Brunswick will receive more in the CCR than they incur in total costs resulting from pollution pricing.  As the pollution price itself encourages fewer GHG emissions, it will both protect the environment and promote green innovation.

Payment amounts in subsequent years

CCR will increase annually to reflect increases in the price on pollution under the federal backstop system, until at least 2022. The federal Minister of Finance will make annual announcements of CCR amounts, reflecting the increasing price on pollution and updated levels of direct proceeds.

Based on current projections, Climate Action Initiative payment amounts (excluding the supplement for residents of small and rural communities) in New Brunswick in future years would be as follows:

  2020 2021 2022
First adult 189 247 303
Spouse 94 124 152
Child 47 62 76
Family of Four 377 495 607

Building on the examples above, based on current projections, in 2022, William will receive $607 for his family of four, and Brigitte will receive $584 for her family of three (including the supplement for residents of small and rural communities).

Costs summary

Federal Fuel Charges – Starting in April 2019 and increasing in stringency over time, the federal pollution pricing system will add a nominal cost to everyday fuels.

In New Brunswick, for example, in 2019 the fuel charge on gasoline will be 4.42 cents per litre in 2019 and the fuel charge for natural gas used in home heating will be 3.91 cents per cubic metre – these rates will increase over time. A complete list of fuel charge rates is available on Finance Canada’s website.

Estimated Annual Costs – We know from experience in British Columbia, Alberta, and Quebec that provinces with a price on carbon pollution in 2017 were the fastest-growing economies in Canada.

Under the federal system, the average cost impact for a household in New Brunswick is $202 in 2019, which is less than the corresponding average for the CCR ($248). New Brunswick residents can also reduce this cost through many options such as better home insulation, switching to a fuel efficient vehicle, and lower cost options like LED lights.

Studies consistently show the cost of inaction is much greater than the cost of addressing climate change. Extreme weather events like floods and wildfires are becoming more severe and happening more frequently due to climate change.  These disasters can carry huge costs from damaged homes, businesses and infrastructure.  For example, insurance losses related to climate change and severe weather averaged $405 million per year between 1983 and 2008, and $1.8 billion between 2009 and 2017.

Clean growth investments in New Brunswick

The Government of Canada’s Low Carbon Economy Fund is reducing emissions and creating opportunities in New Brunswick by providing over $50 million to support projects that increase energy efficiency in homes and businesses, saving families money and cutting costs for businesses. Investments like these help communities reduce pollution and create good jobs.

Since 2016, the Government of Canada has allocated over $173 million for investments in public transit projects. Investing in accessible busses in Fredericton is one way we’re working to make sure public transit is available for all, ensuring that people can get where they need to go, quickly and safely while reducing pollution. It’s part of the Government’s Investing in Canada Plan.

In addition, the Government of Canada has allocated more than $347 million for projects that reduce emissions, build resilience to the impacts of climate change or provide additional environmental benefits such as clean air and clean water. The Government of New Brunswick and Canada are working together to fund priority projects that will help reduce pollution and grow the economy.

Part of reducing emissions is building up infrastructure for low-emission vehicles, like hybrid plug-in and fully electric cars. Natural Resources Canada’s Electric Vehicle and Alternative Fuel Infrastructure Deployment program provided $950,000 for the installation of electric fast-charging stations in nineteen communities across the province, to help people switch to zero emitting electric cars and travel with confidence all over the province.

To protect Canadians from the impacts of climate change, Canada is collaborating with New Brunswick and other Atlantic provinces to create a regional climate expert organization that will work with the Government of Canada’s Canadian Centre for Climate Services. Other initiatives, such as the National Trade Corridors Fund and First Nation Adapt Program, are increasing New Brunswick’s resilience to climate impacts by supporting a study on adapting transportation infrastructure around the Chignecto Isthmus corridor, a vulnerability assessment to community infrastructure from inland flooding, and an assessment of the health impacts related to a changing climate. These studies will make sure that New Brunswick is ready for the impacts of climate change and that Canadians will remain safe.

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