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As of Jan. 1, every Canadian and all Canadian businesses are paying a price on carbon.
The federal Greenhouse Gas Pollution Pricing Act means provinces that do not have their own price on pollution that meets Ottawa’s standard get the federal carbon tax applied to them.
The federal tax is currently $20 a tonne and will rise $10 a year every April until it hits $50 a tonne in 2022.
For individuals and businesses with relatively small emissions, that carbon levy is applied to liquid and gaseous fuels at the point of purchase. Households receive rebates on income taxes to offset the cost. The amount varies by province to account for different uses of fossil fuels.
There is separate carbon pricing for big industrial emitters, which are charged the tax on a portion of their emissions, rather than on the fuels they purchase. This is known as the “output-based pricing system,” and the carbon price is charged on between five and 20 per cent of emissions, depending on the industry.
Some provinces have both federal systems in place, while others use one or the other. On Thursday, Manitoba decided to enact its own small-emissions tax starting July 1.
Here’s a quick look at how the national price on pollution works in every province and territory:
British Columbia
B.C. charges a provincewide carbon tax of $40 per tonne on fossil fuels, including gasoline, natural gas and diesel. The province intends to raise the tax to $45 on April 1 and to $50 on April 1, 2021.
B.C. uses revenues to invest in clean technology and environment policies, as well as to provide direct rebates to individual households with an income-based tax credit. The credit is worth up to $154.50 per adult (or for the first child in a single-parent home) and $45.50 per child. The credit is phased out as income rises. It’s eliminated completely for any family with a net income over $62,964.
Alberta
Albertans began paying the federal carbon levy Jan. 1. In February, the provincial government won a challenge of the tax when the Appeal Court found the legislation unconstitutional. The broader national fight is bound for the Supreme Court.
As it stands, the carbon rebate in Alberta will amount to $888 for a family of four in 2020. The amount represents a rebate for carbon tax paid over 15 months — from Jan. 1, 2020, to March 31, 2021 — because Albertans were not included in the rebate program last year.
Ottawa approved Alberta’s charge of $30 a tonne on industry emissions of more than 100,000 tonnes a year. Emitters have been asked to reduce their levels by 10 per cent in the first year, and one per cent a year after that. If they don’t hit those reductions, they pay the carbon tax on whatever they emit over their cap, or must buy credits from firms that do better than their targeted reductions.
Saskatchewan
Saskatchewan families and small businesses pay the federal carbon levy. A Saskatchewan family of four received $609 in a rebate in 2019 are to get $809 in 2020.
Saskatchewan has a large industrial carbon price that partially meets Ottawa’s requirements. The federal government charges its output-based carbon price on electricity generators and pipelines that are not subject to the provincial system.
Saskatchewan lost its court challenge of the tax. The Supreme Court is to hear the appeal in March.
Manitoba
Manitoba plans to enact a $25-per-tonne tax starting July 1.
It originally planned a $25-per-tonne levy in 2017, but withdrew it when the federal government said it was not high enough. The federal government then imposed its own tax. A family of four received $339 from the Climate Action Incentive in 2019 and is to receive $486 in 2020.
It’s not immediately clear whether the federal government will agree to Manitoba’s plan.
Manitoba is also fighting the federal levy in court, although a date for a hearing has not been set.
The province is also subject to the output-based system on any facility emitting more than 50,000 tonnes of greenhouse gases each year.
Ontario
Ontario families and small businesses pay the federal carbon levy. Ontario challenged Ottawa’s authority to impose the carbon levy in court and lost. It is also appealing to the Supreme Court.
An Ontario family of four received $307 in 2019 from the climate rebate and is to receive $448 in 2020.
The province is also subject to the output-based system on any facility emitting more than 50,000 tonnes of greenhouse gases each year.
Quebec
Quebec has had a cap-and-trade system since 2013. It sets caps on emissions by industry. Companies that cannot reduce their emissions below the cap must buy credits from a carbon market shared with California. Each jurisdiction sets a minimum price per tonne for credits, which in Quebec last year was the equivalent of $20.82 per tonne of emissions.
Individuals pay the carbon cost embedded in the price of goods.
New Brunswick
New Brunswick is subject to the federal carbon levy, but on April 1 will switch to a provincial tax that will involve introducing a price per tonne on carbon, then reducing the province’s gas tax by a similar amount to make the cost to individuals mostly neutral.
New Brunswick industry is subject to the federal output-based system, but has proposed its own version that would require big emitters to cut pollution by 10 per cent over the next decade.
Nova Scotia
Nova Scotia introduced a cap-and-trade system in January 2019 that meets federal standards. It sets limits on emissions in specific industries, and companies that emit more than their limit must buy credits from companies that emit less than their limit.
Prince Edward Island
P.E.I. has a provincial carbon levy of $20 a tonne on most liquid and gaseous fuels with the exception of furnace oil and propane.
The province opted to use Ottawa’s output-based system for big emitters.
Newfoundland and Labrador
Newfoundland and Labrador introduced a carbon price of $20 per tonne on Jan. 1, 2019. At the same time, it reduced its provincial gas tax by about the same amount.
The province has an output-based system for big industry that sets targets for cutting emissions.
Yukon
Yukon opted to use the federal carbon levy but was allowed to collect the revenues itself. It is providing rebates of about $172 per family of four in 2019 and 2020.
The territory is paying $20 per tonne on fuels. It is exempt from paying the tax on aviation gasoline and aviation turbo fuel.
It is also using the federal output-based system for big emitters.
Northwest Territories
The N.W.T. implemented a territorial carbon tax of $20 per tonne last fall, with various rebates and offsets to aid residents, including a 100 per cent point-of-purchase rebate on home heating fuel tax, and a cost-of-living benefit of $260 per adult and $300 per child.
Nunavut
Nunavut opted to use the federal carbon levy. It is reducing the cost to individuals by covering half the levy. So instead of the cost of five gallons of gasoline going up 90 cents, it went up 45 cents. The levy applies to all fuels except aviation gasoline and aviation turbo fuel.
Nunavut is also using the federal output-based system for industrial emitters.
This report by The Canadian Press was first published March 5, 2020
The Canadian Press
