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Output-Based Pricing System

On March 14, 2025 the Government of Canada announced the fuel charge under Canada’s carbon pricing system will be $0 effective April 1, 2025. Consequential amendments to the Output Based Pricing System Regulations have been made. Information on this page is subject to change.

Under the Greenhouse Gas Pollution Pricing Act, the federal carbon pollution pricing system has two parts:

The federal OBPS is designed to ensure there is a price incentive for industrial emitters to reduce their greenhouse gas emissions and spur innovation while maintaining competitiveness and protecting against “carbon leakage” (i.e. the risk of industrial facilities moving from one region to another to avoid paying a price on carbon pollution).

On this site, you will find information about the OBPS.

Important notice 

The OBPS Reporting module in ECCC’s Single Window System is open for submission of annual reports and verification reports for the 2024 compliance period. The deadline for submitting an annual report and verification report under the OBPS for the 2024 compliance period is Monday June 2, 2025. Visit the Quantification, Reporting and Verification tab for more information. 

Overview

Legislation and regulations

The Output-Based Pricing System Regulations (OBPS Regulations), established under Part 2 of the Greenhouse Gas Pollution Pricing Act (GGPPA), were published in the Canada Gazette, Part II, on July 10, 2019, following the publication of a Notice of Intent in December, 20, 2018. The OBPS Regulations apply in jurisdictions listed on Part 2 of Schedule 1 to the GGPPA (backstop jurisdictions), as shown on the Carbon pollution pricing systems across Canada web page.

Amendments to the Output-Based Pricing System Regulations

On November 22, 2023, the Regulations Amending the Output-Based Pricing System Regulations and the Environmental Violations Administrative Monetary Penalties Regulations were published in the Canada Gazette, Part II. These amendments ensure continued greenhouse gas (GHG) emissions reductions, reduce the administrative burden, and improve the implementation of the OBPS Regulations. Certain amendments are effective retroactively to January 1, 2023, as enabled by section 194 of the GGPPA and the Notice of Intent published on October 28, 2022, while others come into force on the day on which they are registered or on January 1, 2024. The Quantification Methods for the Output-Based Pricing System Regulations is a technical document incorporated by reference that contains the detailed emissions quantification methods previously included in Schedule 3 to the OBPS Regulations and was published on December 12, 2023.

On September 1, 2021, the Regulations Amending the Output-Based Pricing System Regulations were published in the Canada Gazette, Part II. These amendments improve clarity and implementation of the OBPS Regulations and prepare the federal OBPS for transitions to provincial carbon pollution pricing systems. Certain amendments are effective retroactively to January 1, 2021, as enabled by section 194 of the GGPPA and the Notice of Intent published on December 23, 2020, while others came into force on January 1, 2022.

Amendments to Schedules to the Greenhouse Gas Pollution Pricing Act

On July 5, 2023, the Order Amending Part 2 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act was published in the Canada Gazette, Part II. This Order removes the province of Saskatchewan from Part 2 of Schedule 1 to the GGPPA retroactively to January 2023, as enabled by section 194 of the GGPPA and the Notice of Intent that was published on December 23, 2022.

On October 26, 2022, the Order Amending Schedule 3 to the Greenhouse Gas Pollution Pricing Act (Order Amending Schedule 3) and the Order Amending Schedule 4 to the Greenhouse Gas Pollution Pricing Act (Order Amending Schedule 4) were published in the Canada Gazette, Part II. The Order Amending Schedule 3 updates the global warming potential values for greenhouse gases listed on Schedule 3 to the GGPPA as of January 1, 2023, in accordance with the Intergovernmental Panel on Climate Change’s Fifth Assessment Report. The Order Amending Schedule 4 updates the excess emissions charge for calendar years 2023 to 2030. The excess emissions charge increases to $65 per tonne of CO2e in 2023 and will increase by $15 per calendar year until 2030, resulting in an excess emissions charge of $170 per tonne of CO2e in 2030.

On September 1, 2021, the Order Amending Part 2 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act (the Order) was published in the Canada Gazette, Part II. This Order removes New Brunswick from Part 2 of Schedule 1 to the GGPPA retroactively to January 1, 2021, as enabled by section 194 of the GGPPA and the Notice of Intent published on December 23, 2020, and of Ontario as of January 1, 2022.

Return of OBPS Proceeds

Proceeds from the OBPS in backstop jurisdictions will be returned to the jurisdiction of origin to support industrial projects to cut emissions and use new cleaner technologies and processes.

For more information, please visit the Output-Based Pricing System Proceeds Fund.

For general information about the return of carbon pollution pricing proceeds visit Carbon Pollution Pricing Proceeds Programming.

Fuel charge

The fuel charge component of the federal carbon pollution pricing system is administered by the Canada Revenue Agency.

Further information on the fuel charge

Historic documents

Registration

General  

Registration in the Output-Based Pricing System (OBPS) is done by a person responsible for a facility.

Where there is more than one person responsible for a facility, the requirements of the GGPPA and its regulations apply to each person responsible. However, compliance by any one of the responsible persons will satisfy the obligations. As such, one person responsible must apply for registration on behalf of the others. Before applying to register, persons responsible must decide amongst themselves who will submit the application on behalf of all of them.

Mandatory participation

Under subsection 171(1) of the Greenhouse Gas Pollution Pricing Act (GGPPA), a person responsible for a covered facility must apply for registration of that facility in the OBPS. A facility that is in a backstop jurisdiction and meets the criteria set out in section 8 of the Output-Based Pricing System Regulations (OBPS Regulations) is a covered facility. Persons responsible for facilities that meet the criteria in section 8 of the OBPS Regulations must apply to register those facilities in the OBPS within 30 days of the facility meeting those criteria.    

Voluntary participation

Under subsection 172(1) of the GGPPA, a person responsible for a facility located in a backstop jurisdiction that does not meet the criteria outlined in section 8 of the OBPS Regulations may request that the facility be designated as a covered facility.

The Policy Regarding Voluntary Participation in the Output-Based Pricing System (effective January 1, 2024) outlines the considerations the Minister will take into account when making a designation, and has more information on applying for voluntary participation.

Requests for voluntary participation in the OBPS are due each year by July 15 for participation starting January 1 of the following calendar year.

Additional Industrial Activities

An additional industrial activity (AIA) is an industrial activity that is not set out in column 1 of Schedule 1 to the OBPS Regulations that is recognized by the Minister as being from a sector at significant risk of competitiveness impacts and carbon leakage resulting from carbon pricing.

The Policy for recognizing additional industrial activities from sectors at significant risk of carbon leakage and competitiveness impacts outlines the considerations the Minister will take into account when deciding whether to recognize activities as additional industrial activities.

In 2024, the Minister published a List of Recognized Additional Industrial Activities under the Output-Based Pricing System. Starting with the 2024 compliance period, all covered facilities engaged in AIAs must include these activities in their emissions limit calculations.  

Requests to have an industrial activity recognized by the Minister as an additional industrial activity must be submitted by February 15 of each calendar year.

Requests from facilities applying for designation as a covered facility that also include a request to have an additional industrial activity recognized by the Minister must be made by February 15.

Requests for the recognition of an additional industrial activity that is not from a sector listed in Table 1 of Appendix A of the Policy for recognizing additional industrial activities, must also include a request for the sector to be added to Table 1 of Appendix A.

The List of additional industrial activities will be updated annually. Facilities engaged in newly recognized additional industrial activities must include these activities in their emissions limit calculations starting with the compliance period that follows the calendar year in which the additional industrial activity is recognized. Covered facilities engaged in newly recognized additional industrial activities must submit a notice of change to update the registration information for the facility.

How to apply to register or notify of changes to registration information

Persons applying to register or notify the Minister of changes to registration information must use the Registration and notice of change module in ECCC’s Single Window System (SWIM). Persons who have already reported facility emissions to the Greenhouse Gas Reporting Program (GHGRP) will already have access.

  1. Go to ECCC’s Single Window System.
    If you do not have a SWIM account, refer to the instructional videos and guidance on how to create an account.
  2. Log in to SWIM
  3. Click on ECCC and Partners Greenhouse Gas Reporting and ECCC Output-Based Pricing System (OBPS). 
  4. Click on OBPS Registration and notice of change.
  5. Follow the instructions in the blue and grey information boxes throughout the system to complete registration or a notice of change.  

Notifying of changes to registration information

Under section 48 of the OBPS Regulations, a person responsible for a covered facility must notify the Minister in writing, within 30 days after a change to any of the information submitted in an application to register a facility or an application for designation. This includes changes in the facility’s perimeter or to the facility’s industrial activities.

Ceasing to be a covered facility

Section 7 of the OBPS Regulations provides that a facility ceases to be a covered facility when it has ceased production for all specified industrial activities for five consecutive compliance periods or the person responsible for the covered facility makes a request to that effect because it is expected that the specified industrial activities engaged in at the covered facility will cease for at least 12 consecutive months.

A person responsible for a facility that has been designated as a covered facility under subsection 172(1) of the GGPPA may apply to have the designation of the facility cancelled. If the Minister approves the request, cancellation is effective as of December 31 of the calendar year in which the decision is made.

Section 6 of the OBPS Regulations provides that the Minister may cancel the designation and registration of a covered facility if it was expected to emit at least 10 kt of CO2e in any of the three calendar years following the date of first production, but fails to meet this by December 31 of the third calendar year following that date.

Quantification, Reporting and Verification

General

Section 173 of the Greenhouse Gas Pollution Pricing Act requires that, for each compliance period, a person that is responsible for a covered facility must, in accordance with the Output-Based Pricing System Regulations (OBPS Regulations),

  1. submit to the Minister a report that sets out the information that is specified in the regulations with respect to the greenhouse gas emissions limit that applies to the covered facility and any other information that is specified in the regulations; and
  2. cause the report to be verified by a third party.

Reporting deadline

The deadline for submitting an annual report and a verification report under the OBPS Regulations is June 1 of the calendar year following the compliance period.

Content

Each annual report and corrected report must include the information outlined in sections 11 and 12, and Schedule 2 of the OBPS Regulations. Associated verification reports must contain the information outlined in Schedule 5 of the OBPS Regulations.

How to submit an annual report and verification report

The annual report and verification report must be submitted through the OBPS Reporting module in ECCC's Single Window System.

To submit an annual report and verification reports, follow these steps:

Step 1: Ensure the information in your registration application is accurate and up to date

Ensure that information in your application to register in the OBPS is up to date by logging into the Registration and notice of change module in ECCC's Single Window System.

It is important the information in your application for registration be up to date and accurate as this information is used to manage access to, and configure, the OBPS Reporting module in ECCC's Single Window System, through which the annual report must be submitted. The Authorized Official named in the registration application is expected to sign the annual report.

See Steps to submitting your OBPS application to register and notice of change (PDF) for information on how to view your registration application and submit a notice of change should you need to update the information in your registration application. Note: the document is being updated and may not reflect the most recent amendments to the OBPS Regulations.

Step 2: Complete and submit your annual report and verification report

Log in to ECCC's Single Window System

Click on ECCC and Partners Greenhouse Gas Reporting and ECCC Output-Based Pricing System (OBPS).  

If you do not see this link, you do not have access. Refer to the instructional videos to learn how to gain access.

A welcome screen will give you the option to continue to GHG Reporting or to OBPS Registration and notice of change or to OBPS Reporting.

Click on OBPS Reporting.

On the OBPS Reporting Dashboard screen, search for the facility for which you want to create a report for by filtering on Responsible Person name and Compliance Period.

Select the + action in the dashboard for the correct facility.

Follow the instructions in the blue and grey information boxes throughout the system to complete all sections.

Notification of errors or omissions

Sections 176 and 177 of the Greenhouse Gas Pollution Pricing Act require that the person responsible for a covered facility notify, as soon as possible, the Minister in writing if within 5 years of submitting an annual report they become aware of an error or omission in the report.  Submitting a Notice of Error is done through the OBPS Reporting module in ECCC's Single Window System.

Quantification

The information to be included in an annual report is set out in the OBPS Regulations. It includes the quantity of greenhouse gas (GHG) emissions and production.

Quantification methods

On November 22, 2023, as part of amendments to the OBPS Regulations, some quantification methods were removed from Schedule 3 to the OBPS Regulations. The Quantification Methods for the Output-Based Pricing System Regulations (Quantification Methods), a document incorporated by reference into the OBPS Regulations, specifies the methods to quantify GHGs, the ratio of heat and the quantity of electricity generated. It applies as of the 2024 compliance period.

Guidance on quantification requirements

Guidance on the quantification requirements of GHGs and production, including emissions limits and calculated output-based standards (OBS) is available for the:

Links to quantification methods referred to in the OBPS Regulations

Verification reports

Third-party verification increases the credibility and integrity of the overall carbon pollution pricing system and informs, in the context of the OBPS Regulations, the Minister of Environment and Climate Change's review of the reported information.

In accordance with the OBPS Regulations, a verification report, must be submitted with an annual report and with a corrected report (if required).

Consult the Verification Guidance for the OBPSR for more information regarding verification requirements

Verifiers should consult the Verification Report Template (.docx) for specific information about format and content of verification reports. An accessible HTML version of the Verification Report Template is available as a reference tool.

Permits to use alternative methods

A person responsible for a covered facility may use a method other than a method or guideline required under sections 17 and 20 of the OBPS Regulations if they have a permit issued in accordance with section 28 of the OBPS Regulations.

The Minister of Environment and Climate Change will determine whether the conditions specified in subsection 28(1) of the OBPS Regulations are met when making a decision about issuing a permit. 

An application for a permit must be submitted to the Minister by a responsible person for a covered facility or their authorized official, in accordance with section 27 of the OBPS Regulations, by March 1 of the year following the compliance period to which the permit would apply, following the process outlined in the application for permit below.

The application for an alternative methods permit can be found here: Application for permit (xls; 267 kB).

Request for confidentiality

As per section 254 of the Greenhouse Gas Pollution Pricing Act (GGPPA), a person that provides information to the Minister of Environment and Climate Change under Part 2 of the GGPPA may submit with the information a written request, with supporting justifications, that the information be treated as confidential.

Fill out this form if you wish to submit a request for confidentiality (PDF).

Compensation, Credits and Credit and Tracking System

Compensation obligation

Under the Output-Based Pricing System (OBPS), persons responsible for covered facilities are required to provide compensation at the prescribed rate for greenhouse gas (GHG) emissions that exceed the facility's annual emissions limit, the excess emissions. The methods for providing compensation are one of the following or a combination of both:

  1. making an excess emissions charge payment electronically to the Receiver General for Canada, and
  2. remitting compliance units, namely surplus credits, federal offset credits, or recognized units.
For compensation provided on or before the regular-rate compensation deadline, the compensation required per CO2e tonne of excess emissions is one compliance unit or the excess emissions charge rate applicable to the compliance period. For compensation provided after the regular-rate compensation deadline, the compensation required for each CO2e tonne of excess emissions is four compliance units or four times the excess emissions charge rate applicable to the compliance period.

Compensation deadlines

The regular-rate compensation deadline is December 15 of the calendar year in which the related annual report must be submitted and the increased-rate compensation deadline is February 15 of the year following the regular-rate compensation deadline.

For the 2023 compliance period, the regular-rate compensation deadline is Monday December 16, 2024, because December 15th is a Sunday.

Credit and Tracking System (CATS)

The Credit and Tracking System (CATS) tracks compliance obligations, credit issuance and transfers, and remittance of compliance units and excess emissions charge payments under the Output-Based Pricing System (OBPS).

Persons responsible for covered facilities under the OBPS are required to open an OBPS account in CATS. Only the authorized official named in the application to register the facility in the OBPS may open the account. The OBPS Operations Office sends information about how to apply to open OBPS accounts in CATS by email to the authorized official, and carbon copies the contact person named in the application to register the facility in the OBPS. If you are an authorized official under the OBPS and did not receive an email with this information, please contact the OBPS Operation Office.

If you need to change the authorized official named in the OBPS Registration application you must submit a Notice of Change in the Registration and notice of change module in ECCC's Single Window System (SWIM) prior to submitting the application to open an OBPS account in CATS. For more information, see Steps to submitting your OBPS application for registration or notice of change (PDF). Note: the document is being updated and may not reflect the most recent amendments to the OBPS Regulations.

Once an authorized official has opened an OBPS account in CATS for a covered facility, they may add additional users.

Making an excess emissions charge payment

Excess emissions charge payments must be initiated in CATS and made via wire transfer or direct deposit. It is essential payees first access CATS before making a wire transfer or direct deposit. The User Guide in CATS provides specific instructions on initiating a payment, on making a wire transfer or direct deposit through your financial institution, and the follow-up steps required in CATS.

Issuing surplus credits

As per section 175 of the Greenhouse Gas Pollution Pricing Act and in accordance with the OBPS Regulations, the Minister of Environment and Climate Change (the Minister) issues surplus credits to persons responsible for covered facilities whose emissions are lower than the applicable emissions limit, provided that the emissions limit is calculated in accordance with the OBPS Regulations and that no material discrepancy exists with respect to the quantity of GHGs and production. However, the Minister will not issue surplus credit to persons responsible for covered facilities for which the Minister had established the emissions limit or determined the quantity of GHGs emitted from the covered facilities for a compliance period. 

Surplus credits will be issued to the applicable OBPS account in CATS after the submission of the related annual report. ECCC will review annual reports and may require corrections that result in previously issued surplus credits being revoked or assignment of compensation obligations.

Transferring surplus credits

CATS features a Message Board that allows users associated with an OBPS account to post a message indicating an interest in buying or selling eligible credits, and other users associated with an OBPS account to respond to posted messages. Only persons associated with a covered facility under the OBPS can use CATS and buy or sell surplus credits at this time. The User Guide in CATS provides specific instructions on transferring surplus credits.

Remitting surplus credits

Use CATS to remit surplus credits against a compensation obligation. The User Guide in CATS provides specific instructions on remitting surplus credits.

Limitations on surplus credits eligible for remittance

New Brunswick, Ontario and Saskatchewan were removed from Part 2 of Schedule 1 to the GGPPA as of January 1, 2021, January 1, 2022 and January 1, 2023, respectively.

As a result, surplus credits issued to a facility in New Brunswick will not be eligible for remittance as compensation for the 2021 or subsequent compliance periods. They will continue to be eligible for remittance as compensation for the 2019 and 2020 compliance periods only.

Surplus credits issued to a facility in Ontario will not be eligible for remittance as compensation for the 2022 or subsequent compliance periods. They will continue to be eligible for remittance as compensation for the 2019, 2020 and 2021 compliance periods only.

Surplus credits issued to a facility in Saskatchewan will not be eligible for remittance as compensation for the 2023 or subsequent compliance periods. They will continue to be eligible for remittance as compensation for the 2019, 2020, 2021 and 2022 compliance periods only.

Note that the serial number of a surplus credit identifies the province in which the facility to which the surplus credit was issued is located. Section 6.1 “Viewing Surplus Credits” of the CATS User Guide, accessible from the left-hand pane on the “Home” tab of CATS, outlines how to read and understand the serial number.

Suspension of certain surplus credits

If surplus credits issued to a facility in New Brunswick, Ontario or Saskatchewan have not been remitted or transferred by the following dates, those credits may be subject to suspension, making them ineligible for remittance or transfer.

  • February 15, 2022, when issued to facilities located in New Brunswick and held in the accounts of facilities located in that province;
  • February 15, 2023, when issued to facilities located in Ontario and held in the accounts of facilities located in that province;
  • February 15, 2024, when issued to facilities located in Saskatchewan and held in the accounts of facilities located in that province.

Please note that, as stated in the “Limitations on surplus credits eligible for remittance” section, whether or not credits are suspended, surplus credits issued to a facility in New Brunswick will not be eligible for remittance as compensation for the 2021 or subsequent compliance periods; surplus credits issued to a facility in Ontario will not be eligible for remittance as compensation for the 2022 or subsequent compliance periods and surplus credits issued to a facility in Saskatchewan will not be eligible for remittance as compensation for the 2023 or subsequent compliance periods.

Remitting Federal Offset Credits

Federal offset credits can be remitted as compensation for emissions that exceed a facility's emissions limit. Further information on the Canada's Greenhouse Gas (GHG) Offset Credit System and the federal offset protocols is available on the Canada's GHG Offset Credit System web page.

Remitting recognized units

A unit or credit will be recognized as a compliance unit if it meets the eligibility requirements in section 78 of the federal Output-Based Pricing System Regulations (OBPS Regulations). As outlined in paragraph 78(1)(b) of the OBPS Regulations, the unit or credit must be issued under a GHG offset program and protocol that appear on the List of Recognized Offset Programs and Protocols for the Federal OBPS. Environment and Climate Change Canada maintains the List of Recognized Offset Programs and Protocols for the Federal OBPS.

For further information on requirements for use of recognized units for compensation under the federal OBPS, see:

For comments

Share your thoughts

Seeking feedback from stakeholders is a key activity of Environment and Climate Change Canada (ECCC), as it supports open and transparent government. It allows for discussion among stakeholders and the Government of Canada, about designing, implementing and evaluating the federal Output-Based Pricing System (OBPS).

Current comment period

There is no ongoing consultation period.

Closed comment period

For further information, please contact the OBPS Operations Office.

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