On July 28, 2016, we wrote about the Government of
Canada's intention to propose a plan for national carbon
pricing in the fall. At the time, many questions remained
outstanding, such as: Is each province or territory required to put
a price on carbon? If so, should each province or territory have
its own pricing mechanism? Will the Government of Canada create a
system binding on every province or territory? Prime Minister
Trudeau has now provided answers as the Government announced
pan-Canadian carbon pricing by 2018.
In an address to the House of Commons, Prime Minister Trudeau
all Canadian jurisdictions will have
carbon pricing in place by 2018
provinces and territories may decide
whether to implement carbon pricing by using a carbon tax or
adopting a cap and trade system – if a province or territory
does not implement a mechanism, the Government of Canada will do so
regardless of the pricing mechanism,
there will be a nationwide minimum price for carbon starting at $10
per tonne of carbon dioxide in 2018 and rising by $10 per year to
reach $50 per tonne in 2022
carbon pricing will be applied to a
"common and broad" set of sources across the country
revenues from carbon pricing will
stay with the provinces or territories to be used as they see fit,
this approach will be reviewed again
in 2022 to confirm its efficacy and to decide on future price
With this announcement, the federal government continues towards
its objective of reducing Canada's emissions by 30 percent
below 2005 levels and honouring its promises at COP 21 in Paris
Now the focus shifts to the provincial and territorial
governments across Canada, especially those currently without a
carbon pricing mechanism. How will the provinces and territories
respond, as Canada moves towards its coveted sustainable and clean
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