VIDEO: Highlights of the Canadian Federal Government Carbon Tax
On January 15 2018, the Canadian Federal Government laid out the details of it plan to implement a $50/tonne carbon tax in proposed legislation named the “Greenhouse Gas Pollution Pricing Act”. The highlights are:
- The Federal Tax will only apply in Provinces and Territories that do not have a comparable carbon tax already in place
- That means, as of today, it will apply only to 20% of the Canadian population
- Specifically those in Saskatchewan, most Atlantic provinces, NWT, Nunavut, Yukon will be subject to the Canadian Federal carbon levy
- Newfoundland & Labrador and others are expected to announce their own carbon tax systems in the spring of 2018
- The tax will start at $10/tonne in 2018 and will be at $50/tonne by the end of 2022
- There are two parts to the system, a consumer gas tax and and industrial emissions tax
Consumer Gas Tax:
- 2018 Gasoline = $0.023 / liter 2022 Gasoline = $0.115 / liter
- 2018 Diesel = $0.027 / liter 2022 Diesel = $0.135 / liter
- 2018 Propane = $0.015 / liter 2022 Diesel = $.075 / liter
Industrial Carbon Emissions Tax:
- The tax is an “output based system” which means it will be charged where the carbon is released (think burning gasoline in your car vs producing gasoline)
- Only those companies that produce more carbon than the average today will pay the carbon tax
- Before the end of 2018 the Canadian Government will evaluate each industrial sector (think Oil & Gas, Mining, Transportation…) and determine the current average energy used per unit of output in each of those sectors
- Companies that produce more carbon than industry average will have to buy carbon credits
- Companies that produce less carbon than the industry average will be able to sell the difference in carbon credits