Carbon pollution pricing – what you need to know

The Government of Canada has developed a federal carbon pollution pricing system as part of its plan to implement a federal greenhouse gas emissions pricing structure.

The Greenhouse Gas Pollution Pricing Act (the Act), which implements the federal carbon pollution pricing system, received Royal Assent on June 21, 2018 and is composed of two key parts. Part 1, administered by the Canada Revenue Agency (CRA), applies a charge to 21 types of fuel and combustible waste. Part 2, administered by Environment and Climate Change Canada, introduces an output-based pricing system (OBPS) for industrial facilities.

On October 23, 2018, the Government of Canada proposed a list of provinces and territories that will be subject to the federal system. Part 1 of the federal system (the fuel charge) is proposed to apply in Saskatchewan, Manitoba, Ontario and New Brunswick beginning April 1, 2019, and in Nunavut and Yukon beginning July 1, 2019. These proposed provinces and territories are known as listed provinces for the purposes of the fuel charge.

To make sure your business is up-to-date on the fuel charge, use our Get registered for the New CRA Fuel Charge Program information sheet (PDF).

Registration starts in January 2019

Businesses with certain activities in a proposed listed province can register with the CRA to ensure they fulfill their obligations under Part 1 of the Act.

Mandatory registration  

Businesses that have activities in a proposed listed province, such as fuel producers, distributors, importers, or certain users of combustible waste, as well as persons that are air, marine, rail or road carriers, may have to apply for registration with the CRA for purposes of the fuel charge.

Registration is required before April 1, 2019 as proposed if a business has activities in Saskatchewan, Manitoba, Ontario and New Brunswick or before July 1, 2019 if they have activities in Nunavut or Yukon, as proposed

Voluntary registration

In some circumstances, registration as distributors, importers, emitters, users of fuel, or specified carriers is voluntary.

Get an exemption certificate

Certain businesses may be eligible to use an exemption certificate.  Where applicable, this certificate will allow them to accept the delivery of fuel without the application of the fuel charge at that time. 

 

How the charge applies

Generally, a charge applies on 21 types of fuel delivered, transferred, used, produced, imported or brought into a proposed listed province. It also applies on combustible waste that is burned, such as tires and asphalt shingles, in a proposed listed province, for the purpose of producing heat or energy.

In most cases, the charge applies early in the supply chain and is payable by a registered distributor. End users generally have no obligations in respect of the fuel charge. The fuel that they purchase will already have the charge embedded in the price.

What happens to inventory

Persons that are holding inventories of fuel in the proposed listed provinces on April 1, 2019 as proposed, for Saskatchewan, Manitoba, Ontario and New Brunswick, or on July 1, 2019 as proposed, for Nunavut or Yukon, may be required to pay a charge on fuel held in the proposed listed province in accordance with the Act.

For more information, visit Charge on fuel held in a listed province on adjustment day.

If you’re a…

Road carrier

Generally, a road carrier is required to register if it has business activities that are interjurisdictional, for fuel that is gasoline, light fuel oil, marketable natural gas, or propane if the person uses fuel of that type in a specified commercial vehicle in a proposed listed province. The exception to this would be if the person is, or is required to be, registered for the same type of fuel as a distributor, a specified air carrier, an air carrier, a specified marine carrier, a marine carrier, a specified rail carrier, or a rail carrier. A road carrier that has business activities only within a proposed listed province will not have to register with the CRA for purposes of the fuel charge. For example, a road carrier that delivers goods only within the boundaries of a proposed listed province will not have to register.

Farmer

Farmers do not have to register with the CRA. Under the Act, farmers may be able to use an exemption certificate and benefit from relief of the charge in specific circumstances. For example, a registered distributor may deliver gasoline or light fuel oil to a farmer at a farm in a proposed listed province without the charge being payable at that time as long as the gasoline or light fuel oil is for use in the course of eligible farming activities and the farmer provides an exemption certificate to the registered distributor in accordance with the Act.

Fisher

Fishers do not have to register with the CRA. Under the Act, fishers may be able to use an exemption certificate and benefit from relief of the charge in specific circumstances. For example, a registered distributor may deliver gasoline or light fuel oil to a fisher in a proposed listed province without the charge being payable at that time as long as the gasoline or light fuel oil is for use in the course of eligible fishing activities and the fisher provides an exemption certificate to the registered distributor in accordance with the Act.

Greenhouse operator

As proposed by the Government, greenhouse operators may not have to register with the CRA. Under the proposed relief, greenhouse operators may be able to use an exemption certificate and benefit from partial relief of the charge for natural gas and propane in specific circumstances.

Remote power plant operator that generates electricity for remote communities

As proposed by the Government, remote power plant operators that generate electricity for remote communities would not have to register with the CRA. Under the proposed Act, remote power plant operators could use an exemption certificate and benefit from relief of the charge in specific circumstances.

Reporting your charges

Most businesses registered for purposes of the fuel charge will have monthly reporting periods with the CRA. A person that is registered only as a road carrier will report on a quarterly basis. For more information, visit Report the fuel charge.

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: