The federal government will also begin applying the federal fuel charge in New Brunswick at the province’s request, with the exact timing to be announced in the coming months. The federal fuel charge will also newly apply in Nova Scotia, Newfoundland and Labrador, and Prince Edward Island starting July 1, 2023. The Output-Based Pricing System applies in Manitoba, Prince Edward Island, the Yukon, Nunavut, and partially in Saskatchewan. The fuel charge applies in Ontario, Manitoba, Yukon, Alberta, Saskatchewan and Nunavut. Under the Greenhouse Gas Pollution Pricing Act (GGPPA), adopted on June 21, 2018, the federal pricing system has two parts: a regulatory charge on fossil fuels like gasoline and natural gas, known as the fuel charge, and a performance-based system for industries, known as the Output-Based Pricing System. The federal government published strengthened standards in August 2021 for the 2023 to 2030 period. This ensures consistency and fairness for all Canadians. If a province decides not to price pollution, or proposes a system that does not meet these standards, the federal system is put in place. The federal government sets minimum national stringency standards that all systems must meet to ensure they are comparable and contribute their fair share to reducing greenhouse gas emissions. Canada’s approach is flexible: any province or territory can design its own pricing system tailored to local needs, or can choose the federal pricing system. Since 2019, every jurisdiction in Canada has had a price on carbon pollution. Putting a price on carbon pollution is widely recognized as the most efficient means to reduce greenhouse gas emissions while also driving innovation. Infographic by Environment and Climate Change Canada.Ĭarbon pricing is about recognizing the cost of pollution and accounting for those costs in daily decisions. Using less energy: By using less energy-for example by biking, driving a more fuel-efficient car, or insulating their homes to reduce energy use-Canadians can reduce the price they pay on pollution while still collecting the full Climate Action Incentive payment. Where families receive Climate Action Incentive payments, eight out of ten households get more money back than they spend on pollution pricing. In Yukon and Nunavut, proceeds are returned directly to the territorial governments at their request. Residents of Nova Scotia, Prince Edward Island and Newfoundland and Labrador will receive three quarterly payments starting in July 2023, when the federal fuel charge starts to apply. The map shows quarterly payment amounts for a family of four for 2023-24. Provinces and territories in yellow: Provincial/Territorial system.Provinces and territories in green: Federal system, where eligible families receive their Climate Action Incentive payments four times a year.The federal pollution pricing system makes life affordable by returning money to families through Climate Action Incentive payments-with low- and middle-income families benefiting the most. It creates a financial incentive for people and businesses to pollute less.Īll the money from the federal price on pollution charged to fuel goes directly back to benefit Canadian families, businesses, farmers and Indigenous groups-in the same province or territory where it was collected. Pricing carbon pollution is recognized as one of the most effective and efficient approaches to reduce the greenhouse gas emissions that cause climate change. How Canada’s Carbon Pollution Pricing System Works
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