Pricing carbon pollution

Reducing pollution and growing the clean economy

Taking action

The Government of Canada will work with the provinces and territories to:

  • Implement carbon pricing systems throughout Canada by 2018.
  • Find solutions, in collaboration with the territories, and with Indigenous Peoples, that address their unique circumstances.
  • Complete an interim report in 2020, which will be reviewed and assessed by First Ministers. As an early deliverable, the review will assess approaches and best practices to address the competitiveness of emissions-intensive trade-exposed sectors.
  • Complete a full review of carbon pricing by 2022 to assess stringency, effectiveness and to compare systems across Canada.

Canada is taking action with our plan to price carbon pollution. In doing so, we can reduce our greenhouse gas emissions and send a clear signal to entrepreneurs, industry and investors that we are moving to a low-carbon future.

In fact, 97% of Canadians live in a province or territory that has committed to pricing carbon pollution. BC and Alberta use a carbon levy. Quebec and Ontario have cap-and-trade systems, where businesses need permits to emit carbon pollution, which they can trade amongst themselves under an overall cap. Quebec linked its system with California, and Ontario plans to join in 2018.

As outlined in the Government of Canada’s benchmark, there will be a price on carbon pollution throughout Canada by 2018. Each jurisdiction will design and implement its own carbon pricing system, either an explicit price on carbon pollution or a cap-and-trade system—one that works best for them.

The Government of Canada recognizes the unique circumstances of the territories, and of Indigenous Peoples, including high costs of living and of energy, challenges with food security and emerging economies. We will work with the territories, and with Indigenous Peoples, to find solutions that address their circumstances.

Provinces and territories will keep any revenues generated by pricing carbon pollution. They can use the revenues according to its needs, for example to support consumers, businesses or vulnerable groups. BC uses its revenue to cut taxes on consumers and businesses. Alberta recycles revenues to support consumers, small businesses and clean technology programs. Both Ontario and Quebec use revenues to support climate change programs.

Pricing carbon pollution makes good business sense. Many business leaders across all sectors support carbon pricing in Canada. More than two dozen Canadian companies have joined the World Bank’s Carbon Pricing Leadership Coalition – including mining companies and retailers, major oil companies and Canada’s five biggest banks – all supporting a price on carbon pollution. These companies understand that as the world moves towards a low-carbon economy, pricing carbon pollution will help Canadian businesses, investors and consumers make low-carbon choices. It will also drive innovation, and keep Canada competitive with other countries.

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