Canada: Federal Carbon Tax: What Impacts For Quebec?

Last Updated: December 6 2018
Article by Julie Belley Perron and Roger Bill


On June 21, 2018 the federal Greenhouse Gas Pollution Pricing Act (the "GGPPA"), published pursuant to Part 5 of the Budget Implementation Act 2018, received royal assent and established the federal standard for a compliant carbon pricing regime. The purpose of the GGPPA is to incentivize greenhouse gas emissions regulation broadly throughout Canada, notably considering the different policy initiatives in this regard across the country. The GGPPA will be implemented in those provinces or territories that either request the federal system or do not have a legislative scheme in place which the federal government deems compliant with the federal standard.

On October 23, 2018 the federal government released draft regulatory proposals listing Ontario, New Brunswick, Manitoba, and Saskatchewan as provinces that will be subject to the federal system in 2019 and announced that Yukon and Nunavut would voluntarily participate (collectively the "Listed Provinces"). Prince Edward Island will also partially be subjected to the GGPA.

Despite the fact that Quebec does not currently fall under the scope of the GGPPA, businesses that are involved in transporting fuel may be indirectly affected when doing business in any of the Listed Provinces. In this bulletin, we will address the general implications of the GGPPA, as well as certain indirect effects it may have on Quebec industry.

The GGPA consists of two main features: (i) part one consists of a carbon tax on fossil fuels which will enter into force in some Listed Provinces in April and others in July 2019; and (ii) part two consists of an output-based pricing system ("OBPS") for industrial facilities in Listed Provinces, which will enter into force in January 2019. 

Part one of the GGPPA covers liquid fuels (e.g., gasoline), gaseous fuels (e.g. natural gas) and solid fuels (e.g. coal). When the carbon tax is applied in 2019, there will be a minimum carbon pollution price of $20 per tonne of carbon dioxide equivalent ("CO2e") that will increase by $10 per tonne per year until it reaches $50 per tonne in 2022.

Emissions-intensive industrial facilities covered by the OBPS system will work under a separate regime; those classified as "covered facilities" will pay the carbon tax on the portion of the facility's emissions which exceed the threshold for that particular industrial activity. Facilities that emit less than the applicable threshold will receive compliance units, or "surplus credits",1 from the federal government that they can bank for future use.

Indirect Effects of the GGPPA on Quebec Industry

As it stands, Quebec's cap-and-trade system meets the stringent federal requirements and continues to be considered "a leader in pricing carbon pollution in Canada".2 As such, Quebec will not be directly subjected to the federal pricing system for the time being.

However, certain Quebec companies may have compliance and disclosure obligations. Within the fuel supply chain described in part one of the GGPPA, compliance obligations apply to each of: (i) registered distributors, such as fuel producers or large scale distributors; (ii) registered importers; (iii) registered users, such as facility operators or commercial transportation operators; and (iv) non-registered persons, such as retailers.

Therefore, anyone who wants to bring fuel out of or into a Listed Province will have to be registered as either a distributer or importer, according to the requirements of the GGPA. Generally, there will be a fee for fuel that is used in a Listed Province. In most cases the fee will be paid by the distributor, with exceptions if the person to whom a distributor is delivering the fuel in the Listed Province is excluded from the charge or if an exemption certificate is provided by said person. An example of a person excluded from the charge is another registered distributer or registered emitter. In such instances, there will not be a fee and the registered distributor will be able to deal in fuel with one another.3

Exemption certificates may be given by the person buying fuel. The exemption certificate will apply if the declaration made by the person carrying the exemption certificate is:

  • a registered distributor specific to the type of fuel being delivered;
  • a registered air, marine, or rail carrier specific to the type of fuel being delivered;
  • a registered emitter,4 and the fuel is used at their covered facility;
  • a registered user specific to the type of fuel being delivered and the fuel is being used for a "non-covered activity"5
  • a farmer, when the fuel is delivered to a farm, the fuel is used exclusively for operating certain farming machinery and all, or substantially all, of the fuel is used for farming activities;
  • a fisher, when the fuel is used exclusively in the operation of a certain fishing vessel and that all, or substantially all, of the fuel is used for fishing activities; or
  • a prescribed person, a person of a prescribed class, or a person meeting prescribed circumstances that are present.6

A person importing fuel into Canada and into a Listed Province, or a person bringing fuel into a Listed Province from another province will have to pay a fee unless they have been registered under a certain title (i.e. emitter) and deliver to a registered distributer, who will then pay the fee instead.7 There will generally not be a fee payable when fuel is imported or brought into a Listed Province temporarily and is en route to a destination outside of the Listed Province.8

There may also be additional charges required for registered users, such as commercial carriers, who use or purchase fuel in a Listed Province while there, although such charges are subject to a rebate upon their return, under certain conditions.

Penalties under the GGPA apply when a person tries to use an exemption certificate but is ineligible, in which case the recipient of the fuel will have to pay the original charge in respect to the delivery of fuel and a penalty equivalent to 25% of the amount of the original fuel charge. In addition, if the person knew, or should have known, that the declaration they were making to use the exemption certificate was false, both the recipient and the person delivering the fuel are jointly and severally, or solidarily, liable for the payment of the charge and the penalty, as well as any other related interest or penalties.9

In short, Quebec industry actors must be aware of the potential indirect implications that the GGPPA will have on their distribution activities and fuel consumption and prepare accordingly.

Written in collaboration with  Caitlin McCann, articling student.


1 GGPPA, s. 175.

2 Government of Canada, "Quebec and pollution pricing" (last updated November 9, 2018), online:

3 GGPPA, s.17(2).

4 A person can become an emitter if they are responsible for a covered facility.

5 A non-covered activity is an activity where fuel is used as a raw material, solvent or diluent, or in a way that does not produce heat or energy.

6 GGPPA, s.36.

7 GGPPA, s.19(1)-(3).

8 GGPPA, ss.10-11.

9 GGPPA, s.37(1).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Julie Belley Perron
Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions