Integrating Alberta’s Carbon Pollution Pricing System for Large Industrial Emitters With the Federal Fuel Charge
Canadians understand that pollution is not free, and that when it comes to climate change, doing nothing will cost us all. That’s why the Government of Canada took action to make sure that there is a price on carbon pollution across the country. Pollution pricing will help to protect Canadians from the costs and dangers presented by climate change and support the transition towards a more innovative low-carbon economy, while ensuring that polluters pay.
Last June, the Government of Canada announced that the federal pollution pricing fuel charge will apply in Alberta, effective January 1, 2020, as a result of the province’s repeal of its carbon levy. The Government also indicated that it would monitor any proposed changes to Alberta’s large industrial emitter system and would undertake another benchmark assessment once sufficient details about the new system for large emitters are available.
Today, the Government of Canada announced that Alberta’s Technology Innovation and Emissions Reduction (TIER) regulations—which were announced on October 29, 2019 and will come into force on January 1, 2020—meet the federal government’s stringency requirements for carbon pollution pricing systems, for the emission sources they cover. Accordingly, the province will not be subject to the federal “backstop” output-based carbon pollution pricing system. Alberta’s TIER facilities can apply to Environment and Climate Change Canada and the Canada Revenue Agency in order to register as an emitter, enabling them to obtain fuel without the charge applying.
In support of today’s announcement, the Department of Finance Canada has released a set of draft regulatory proposals under the Greenhouse Gas Pollution Pricing Act, integrating TIER facilities with the federal fuel charge. The regulatory proposals also include measures to ensure other relief related to the federal fuel charge applies appropriately in Alberta, including relief provided to greenhouse operators, remote power plant operators and fishers.
Canadians are invited to provide comments on these draft regulations by January 10, 2020. Please send your comments to email@example.com. Written correspondence related to this consultation can also be mailed to:
Carbon Pollution Pricing
Department of Finance Canada
90 Elgin Street
References to “Announcement Date” in the draft regulatory proposals and explanatory notes accompanying this release refer to today’s date.
“Climate change is real and Canadians right across the country are seeing its effects. Alberta’s decision to use carbon pollution pricing to address industry emissions makes sense—it’s the most economically efficient way to reduce carbon pollution while making sure that industry can continue to compete and succeed. As Albertans join other Canadians in helping reduce the carbon pollution that causes climate change, everyone will benefit.”
– The Honourable Bill Morneau, Minister of Finance
“Canada’s Climate Plan gives provinces the flexibility to design a carbon pricing system that best meets their unique needs while ensuring all systems are stringent, fair, and efficient. We look forward to working with the Government of Alberta to ensure the federal and provincial pricing systems function well together. It’s good news that Alberta’s government has adopted an effective price on carbon pollution for its industry sectors, building on over a decade of experience with pricing pollution from industry in the province.”
– The Honourable Jonathan Wilkinson, Minister of Environment and Climate Change
“Canada’s approach is to give provinces the flexibility to design a carbon pricing system that best meets their unique needs. Today’s announcement is a great example of how we can effectively work together – and we are committed to working closely with the Government of Alberta and all provinces as partners in the global fight against climate change.”
– The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Intergovernmental Affairs
- Not taking action on climate change has costs. More frequent and extreme weather events due to climate change are already costing Canadians billions of dollars a year in insurance expenses. Across the country, Canadians have experienced first-hand the results of devastating wildfires, extreme flooding, severe droughts and stronger storms.
- Pricing carbon pollution has a proven record across Canada and around the world—reducing the carbon emissions that cause climate change while encouraging innovation and maintaining strong economic growth.
- The bulk of the proceeds the federal government collects from Alberta through the fuel charge will be returned directly to Alberta’s individuals and families through Climate Action Incentive payments. Most households will receive more in Climate Action Incentive payments than they incur in total costs resulting from pollution pricing.
- Last year, those provinces with a longstanding price on carbon pollution—British Columbia and Quebec—were among the top performers in gross domestic product growth across Canada.
Media may contact:
Director of Media Relations
Office of the Minister of Finance
Department of Finance Canada