Latest news with #GreenhouseGasPollutionPricingAct
Canada Standard
28-05-2025
- Business
- Canada Standard
Removing the consumer carbon price from Canadian law
The Government of Canada is proposing legislative amendments that would permanently repeal the fuel charge framework under Part 1 of the Greenhouse Gas Pollution Pricing Act (GGPPA) in the following four phases to ensure an orderly process for charge payers. These proposed amendments follow the regulations made in March that already ceased the application of the federal fuel charge, effective April 1, 2025. Phase 1: Charging Provisions Repealed effective April 1, 2025 Effective April 1, 2025, nearly all charging provisions would be retroactively repealed, to reflect in legislation what has already been accomplished by regulations. The only remaining charging provision would be a special rule for certain railways in respect of past fuel charge consumption that needs to be trued-up. Certain railways pay fuel charge based on estimates and must perform a true-up exercise on their fuel charge obligations in respect of the previous year. This provision would remain until October 1, 2025 to allow for this exercise to take place in respect of fuel charge obligations incurred prior to April 1, 2025. Phase 2: Rebate Provisions Repealed effective October 1, 2025 Effective October 1, 2025, all rebate provisions would be repealed. Certain uses of fuel after April 1 but prior to October 1 may give right to a rebate (e.g., fuel charge embedded fuel that is exported during this period). This aligns with the treatment of rebates under the regulations made in March 2025. Rebates for charge paid in error and rebates for reassessment (e.g., to correct accounting mistakes in returns) would continue to be available until the final repeal phase. Phase 3: Registration Provisions Repealed effective November 1, 2025 Effective November 1, 2025, all registration provisions would be repealed. This would give registrants until October 31, 2025, to file returns to claim rebates arising before October 1, 2025. Beyond this date, registration rules are no longer needed. Phase 4: Remaining Provisions Repealed effective April 1, 2035 Effective April 1, 2035, the remaining provisions of Part 1 of the GGPPA would be repealed, including definitions, interpretation rules, administrative and procedural rules, etc. This would provide continuity and certainty for final wind down activities, including CRA administrative processes that may continue to rely on existing rules. Subject to the normal limitation periods in the Act, the CRA would also continue to have legal authority to make reassessments, and charge payers to file amended returns, in respect of fuel charge obligations that accrued prior to April 1, 2025. Related product
CBC
02-04-2025
- Business
- CBC
Here's what you need to know about the end of the consumer carbon tax
Social Sharing As of this week, the consumer carbon tax is no more. After his swearing-in last month, Mark Carney cancelled the tax in his first move as prime minister. But while that may result in saving a bit at the gas pump, it doesn't mean you'll necessarily save money. "This was a policy that was actually putting money in the pockets of lower-income households, in most cases," said Kathryn Harrison, a professor of political science at the University of British Columbia. Here's what you need to know about the carbon tax, and what happens now. What is a carbon tax? Although the term "carbon tax" has become ubiquitous, the fraught political battle over such policies doesn't always lend itself to a clear understanding of the concept. In general, a carbon tax applies a surcharge to the production of greenhouse gases like carbon dioxide and methane, which are significant drivers of global warming and climate change. A carbon tax can be applied to industrial producers who generate greenhouse gases, or to consumers in the form of a surcharge on carbon-based fuels like gasoline, diesel, natural gas and propane. By putting a price on carbon emissions, governments use market signals to incentivize changes in behaviour that otherwise might not happen, or happen slower than desired — comparable to taxing cigarettes to encourage people to quit smoking. What is the Greenhouse Gas Pollution Pricing Act? Aside from a mouthful, it's the federal legislation implementing Canada's carbon pricing system. Passed in 2018, it brought in two kinds of carbon pricing — one for consumers and one for industry. The consumer version took the form of a surcharge on carbon-based fuels. For example, the federal surcharge on gasoline was 17.6 cents per litre before it was removed on April 1. The industrial carbon tax, meanwhile, remains in force. It's what's known as an output-based emissions trading system, which sets a threshold for carbon emissions, above which a company must pay a surcharge. The legislation allowed provinces and territories to implement their own carbon pricing regimes, so long as they met the federal benchmarks. The federal system only applies to provinces and territories that don't meet them. Alberta had a consumer carbon levy — introduced in 2017 by Rachel Notley's NDP government, it was repealed in 2019 by Jason Kenney's United Conservatives. That system was similar to the federal version. The federal system is revenue neutral, which means that proceeds collected through levies are not retained but returned, either to the provinces or, in the case of the defunct consumer tax, to individuals and households in the form of rebates. On the consumer side, rebates were designed to cancel out the cost of the fuel tax. Rebate amounts are not dependent on income or fuel expenditures, which creates an incentive — using lower amounts of fossil fuels means you pay less tax and pocket the rebate. Why is the carbon tax controversial? When the federal government introduced carbon pricing in 2018, it faced criticism and opposition from many conservative politicians. Several provincial governments filed legal challenges, including Alberta, Ontario and Saskatchewan. They argued that the legislation was unconstitutional because it imposed a pollution pricing scheme on provinces and territories that didn't have their own. The Supreme Court ruled in 2021 that the legislation was constitutional. Writing for the majority, Chief Justice Richard Wagner wrote that since carbon emissions are "extraprovincial" by nature and "carbon leakage" across borders is inevitable, there's a regulatory role for Ottawa to ensure that each jurisdiction contributes to the national effort. "A failure to include one province in the scheme would jeopardize its success in the rest of Canada," Wagner wrote. "What is more, any province's refusal to implement a sufficiently stringent GHG pricing mechanism could undermine GHG pricing everywhere in Canada." The decision also stated that the carbon tax is, in fact, not a tax — at least in the constitutional sense — but "regulatory charges" intended to change behaviour, not to raise revenue. Another argument from opponents was that the consumer carbon tax hurt individuals and families by raising the cost of living and eliminating jobs. But one study published late last year found that carbon pricing had contributed less than 0.5 per cent to increases in consumer prices since 2019, a tiny portion of the 19 per cent overall increase during that period. An open letter signed by 200 economists last year refuted many of the talking points of carbon tax critics. Will I save money now? Maybe — or, maybe not. Not having to pay consumer carbon tax might even end up costing you more. Higher-income households stand to benefit the most because they also tend to pay the most carbon tax, both directly (as a surcharge on fuel) and indirectly (when companies pass along the cost of their carbon taxes to consumers). However, research has shown that most households actually receive more in carbon tax rebates than they pay in carbon tax. Getting rid of the consumer carbon tax also stops those rebates — the final one will come this month — which hurts lower-income households the most. "The repeal of the consumer carbon tax is a discouraging moment in terms of the power of misinformation," said Harrison, the UBC professor who studies environmental and energy policy. Her research has found that people consistently overestimated how much they were paying in carbon tax, and underestimated the rebates that they were receiving — misconceptions that led many to view the program as harmful to their economic interests. "Historically, we have talked about environmental problems as caused by big industry," she said. "But in terms of Canada's greenhouse gas emissions, big industrial sources account for under half of our emissions. The rest are vehicles and individual buildings and farms and landfills ... small sources. But I think people aren't aware of that, and so they perceive it as punitive." What happens to the industrial carbon tax? The carbon pricing system remains in place for large industrial emitters — although, like the consumer tax, it only applies where provinces don't have their own systems in place. All provinces except Manitoba and Prince Edward Island already do. Alberta's system was the first in North America when it was introduced in 2007. But if the federal backstop is repealed, as Conservative Leader Pierre Poilievre has promised to do if elected, provincial government would be free to change or eliminate their industrial carbon pricing regimes. NDP Leader Jagmeet Singh has pledged to protect the industrial carbon levy. Carney, the Liberal leader, has said he'll maintain and improve that system, but hasn't said exactly how. How to incentivize decarbonization without a consumer carbon tax is an open question, according to Tom Pedersen, a professor emeritus at the University of Victoria, and the author of The Carbon Tax Question. "What do we do to encourage electrification of our vehicle fleet? What do we do to encourage the addition of more wind power and solar photovoltaic power in those places that have wind and sunshine, like southern Alberta?" he asked. "That's a big challenge I think that somebody needs to take on in this country. And I don't know who's going to lead that challenge. I don't see it emerging right now."
Yahoo
18-03-2025
- Business
- Yahoo
FIRST READING: The 'fake' document at Carney's Trump-style signing ceremony
First Reading is a daily newsletter keeping you posted on the travails of Canadian politicos, all curated by the National Post's own Tristin Hopper. To get an early version sent directly to your inbox, sign up here. One of Mark Carney's first actions as prime minister was to hold a signing ceremony to 'cancel' the consumer carbon tax. 'The consumer carbon tax was too divisive when we should be pulling together. That's why I took action to cancel it on day one,' wrote Carney in a social media post. There are just two problems with the statement: It didn't cancel the carbon tax, it just set the rate to zero. It's also not clear whether the document Carney signed actually did anything — with critics calling it a 'fake' prop designed to mimic an American executive order. 'Our PM is not a US state governor and, unlike state governors, cannot issue orders like this one. It has no legal effect,' read an analysis by Guy Giorno, a lawyer and former chief of staff to prime minister Stephen Harper. Carney's government did indeed zero the carbon tax, but the charge is that the document he signed on Friday had nothing to do with it, and was essentially a mock up for the cameras. Conservative MP Ryan Williams called the signing ceremony 'theatre.' His colleague Michelle Rempel called the document a 'fake' designed to 'copy Donald Trump's daily executive signing ceremonies.' The document signed on Friday by Carney reads, 'I hereby instruct that the fuel charge be removed as of April 1, 2025 and that the April 2025 Canada Carbon Rebate be issued.' Canada's carbon pricing framework is set out in a piece of legislation, the Greenhouse Gas Pollution Pricing Act. So Carney cannot 'cancel' it without convening Parliament and repealing the legislation via the normal legislative process. On top of that, the actual zeroing of the tax was enacted not with whatever Carney signed, but via a much wordier Order-in-Council issued the next day. This document was much more detailed, and ordered the Department of Finance to amend the Greenhouse Gas Pollution Pricing Act 'to set applicable fuel charge rates for all types of fuel and combustible waste to zero after March 31, 2025.' And that order only entered into force after it received the signature of Governor General Mary Simon, not Carney. Since a Canadian prime minister is not the head of state, any executive actions have to receive her signature before they become law. Yuan Yi Zhu, a scholar with the UBC Research Group for Constitutional Law, wrote online that whatever Carney signed on Friday, it 'isn't an order-in-council, which comes from the governor-general, and it isn't a recommendation to the GG for an (Order in Council).' He added, 'it's a fake document masquerading as a legal order by a (prime minister) claiming powers he doesn't have.' In a Saturday reply to the various online critiques of the 'I hereby instruct' document, a former aide to prime minister Justin Trudeau said it was a 'decision note' that got the ball rolling on an eventual order-in-council. Decision notes are indeed a thing, but they don't resemble the simplistic order that Carney signed on Friday. A 2013 internal guide by the Privy Council Office laid out the multi-step process by which an order-in-council typically begins to take shape. It begins as a package known as Ministerial Recommendations filled with details of a decision to be discussed by cabinet. At the close of the document is a 'recommendations box' that gets filled in after cabinet deliberations — which is then used to draft the decision note (or 'record of decision') which informs the creation of an order-in-council. Decision notes are not made public, but they occasionally come to light as the result of an Access to Information request or a public inquiry. One of the most famous decision notes would be the one that precipitated the Trudeau government's 2022 invocation of the Emergencies Act. The note was analyzed in depth by the subsequent Emergencies Act inquiry, and it revealed a document that was much more detailed than a one-page 'I hereby instruct' directive. Drafted by a clerk for the Privy Council, the Emergencies Act decision note was described as providing 'a summary of the information and assessments that the Government had received to date and stated that the legal thresholds for invoking the Emergencies Act had been met.' 'A remarkable comeback': Liberals leading Conservatives in exclusive new poll 'Look inside yourself': Carney gets snippy at reporter when pressed on conflicts of interest And unlike Carney's 'I hereby instruct' document, this one wasn't just a rote declaration requiring Trudeau's signature. It ended with a 'decision box' in which Trudeau indicated his decision whether to invoke or not invoke the Emergencies Act (he went with invocation). Any kind of public signing ceremony is extremely unusual in the Canadian context, and typically only occurs with the signing of treaties or major amendments, such as the Proclamation of the Constitution Act that was signed by Queen Elizabeth II in a public ceremony in 1982. It cost $4,500 per seat for reporters to tag along on Prime Minister Mark Carney's trip to Europe with him. And in the first availability the press pool was able to have with the new prime minister, it became testy over the issue of Carney's private assets. The Globe and Mail's Stephanie Levitz asked Carney on Monday what kinds of assets he put into a 'blind trust' before becoming prime minister, noting that the assets won't become public knowledge until after an expected federal election. 'What possible conflict would you have? Stephanie, I'm complying with the rules, I'm complying with the rules in advance,' an annoyed-looking Carney replied. When CBC's Rosemary Barton asked a follow-up question in the same vein, Carney said, 'Look inside yourself, Rosemary. You start from a prior of conflict and ill will.' The zeroing of the carbon tax instantly negates the most frequent line the Conservatives' have used against the incumbent Liberals. They've held confidence motions over the issue of the carbon tax, called repeatedly for a 'carbon tax election,' and even dubbed the new prime minister 'Carbon Tax Carney.' So, the new line is that even if Carney gets rid of the 'consumer carbon tax,' the Conservatives are going to get rid of all the other carbon taxes. The Greenhouse Gas Pollution Pricing Act, the legislation that contains the measures to charge carbon taxes on fuel and heating oil, also contains measures to charge industries for emissions that exceed a certain threshold. These taxes also get passed onto the consumer in some form, but not as conspicuously. Although Poilievre primarily pitched them as a way to keep Canadian industries (such as steel and aluminum) competitive in the face of U.S. tariffs. Get all of these insights and more into your inbox by signing up for the First Reading newsletter here.
CBC
14-03-2025
- Business
- CBC
Axing carbon tax 'a really good move,' agriculture minister says
Prime Minister Mark Carney was right to end the consumer carbon tax, said newly appointed Agriculture Minister Kody Blois, noting it had become 'very divisive.' A clause in the Greenhouse Gas Pollution Pricing Act allows Carney and his new cabinet to remove the tax without Parliament being in session, he said.
