Nation-Wide Carbon Pricing Will Be Implemented by the End of the Year

Taxing carbon pollution incentivises citizens and companies to look for eco-friendly alternatives

The Pan-Canadian Framework on Clean Growth and Climate Change was developed in 2016 to formulate a plan to curb carbon emissions in Canada with input from Indigenous groups. The framework was agreed to by most of the provinces and territories and the Government of Canada approved it in December of 2016.

The main component of the framework is pricing carbon pollution, and by doing so, it will provide the incentive for industries to spend on creating innovative, low-carbon solutions for consumers. It also requires provinces and territories to have carbon pricing or taxing systems in place so that the related taxes can be implemented nationwide by the end of 2018.

British Columbia already has a carbon tax, and Alberta, Ontario, and Quebec have their own systems in place to curb emissions. The federal plan has two components: taxes on fossil fuel use with annual levy increases and emission limits for different industries. As part of these limits, companies emitting GHG above the set cap are heavily taxed, and those who are below it can sell carbon credits to less efficient competitors.

While taxing carbon pollution will end up costing people, it does provide clear financial incentive for citizens and companies to look for more environmental and low-carbon alternatives and solutions. All money collected per province will go directly back into that region’s economy, helping maintain and increase economic cash flow.

The framework states that, by 2022, carbon emissions must be taxed at $50 per tonne. These taxes are meant to inspire alternative and eco-friendly solutions and ideally, as innovations are developed, the volume of emissions will decrease along with the cost per individual.

In an interview with CTV News at the beginning of April, B.C. Premier John Horgan said he believes the new carbon taxes seen at the pumps will help the economy in the long-term, increase ventures in clean technologies, and reserve funds for green programs.

Due to the B.C. carbon tax, citizens will see a one or two-cent raise in gas prices. Ontario and Quebec currently use a cap-and-trade system to manage their carbon emissions. Other provinces are at different stages of implementing their own carbon pricing systems. Save for Saskatchewan, most Canadian leaders are on board with helping to combat climate change by paying for pollution.


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