A fair and affordable pollution pricing system
Putting a price on pollution remains the most effective way to fight climate change while making life more affordable for Canadians. Not only does pollution pricing ensure it is no longer free to pollute anywhere in Canada, for eight out of ten Canadians who receive Climate Action Incentive payments, the federal pollution pricing system actually puts more money back into their pockets.
The Government of Canada has outlined a system where, over time, it becomes increasingly expensive to pollute. Today, the Honourable Steven Guilbeault, Minister of Environment and Climate Change, announced Canada's strengthened price on pollution that will apply April 1, 2023, and beyond. The federal government also announced today the Climate Action Incentive amounts for the coming year in provinces with the federal approach, which is how the Government of Canada returns the proceeds of pollution pricing directly to households.
Canada's approach to pricing pollution is working. Next year, families who already receive the Climate Action Incentive will see their rebate amounts increase and families in more provinces-Newfoundland and Labrador, Nova Scotia, and Prince Edward Island-will begin receiving Climate Action Incentive payments. At the same time, industries are encouraged to become more efficient and use cleaner technologies. It is spurring new and innovative approaches to reduce greenhouse gas emissions and use energy more efficiently.
Pollution pricing in Canada going forward
- The federal fuel charge will continue to apply in Alberta, Saskatchewan, Manitoba, Nunavut, Ontario, and Yukon.
- The federal fuel charge will expand to Newfoundland and Labrador, Nova Scotia, and Prince Edward Island beginning July 1, 2023, when Canadians in these provinces will receive their first quarterly Climate Action Incentive payment.
- British Columbia, New Brunswick, Northwest Territories, and Quebec will continue to implement their own pollution pricing systems.
In 2023, that will mean direct, quarterly Climate Action Incentive payments for a family of four will increase to the following: $386 in Alberta; $264 in Manitoba; $244 in Ontario; and $340 in Saskatchewan. For new recipients of Climate Action Incentive payments, quarterly rebates for a family of four will start at: $328 in Newfoundland and Labrador; $248 in Nova Scotia; and $240 in Prince Edward Island.
Residents in small and rural communities who receive federal Climate Action Incentive payments also receive a ten percent supplement on their payments to reflect limited access to clean transportation options. The amount for Prince Edward Island includes the ten percent rural supplement, as all residents are eligible.
For pollution pricing of large industries
- The federal Output-Based Pricing System will continue to apply in Manitoba, Prince Edward Island, Yukon, and Nunavut.
- The federal Output-Based Pricing System will no longer apply in Saskatchewan, as the province transitions to apply its own system to cover all required sectors. Canada will work closely with Saskatchewan to ensure a smooth transition for affected facilities.
- Alberta, British Columbia, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Ontario, Quebec, and Saskatchewan will continue to implement their own pollution pricing systems for industrial emissions.
Making home heating more affordable for Canadians
Although the updated pollution pricing system does not come into force until this spring, to help Canadians with the cost of heating their homes, Environment and Climate Change Canada committed $250 million in September 2022 to the Low Carbon Economy Fund to help Canadians get off expensive home heating oil. This week, the Government of Canada announced a new $250 million investment for the Oil to Heat Pump Affordability Grant, a new stream to top-up the existing Canada Greener Homes Initiative provided through Natural Resources Canada. This funding will help tens of thousands of households move to affordable, reliable, and clean electric heat pumps, instead of expensive, carbon-intensive home heating oil that is vulnerable to global price shocks.
