Canada will impose a carbon levy to provinces without climate pricing plans

The federal government of Canada has announced that it will impose a "backstop" carbon tax on fuels in the provinces and territories that have no adequate carbon emission pricing plans and refuse to adopt the country-wide CO₂ pricing system. This "backstop" mechanism will apply in Manitoba, Ontario, New Brunswick and Saskatchewan as of April 2019, and in Nunavut and Yukon as of July 2019: in these provinces, proceeds from the new tax will go directly back to taxpayers (direct rebates named "Climate Action Incentive payments").



The other provinces, namely Quebec, Alberta, British Columbia, Nova Scotia, Prince Edward Island and Newfoundland and Labrador will comply with the federal benchmark. Canada's nationwide climate-change strategy includes a carbon tax, which has to be either adopted by the provinces or imposed by the federal government. The tax will rise by CAD10/tCO₂eq (around US$7.6/tCO₂eq) each year from CAD20/tCO₂eq (around US$15.3/tCO₂eq) in 2019 to CAD50/tCO₂eq (around US$38/tCO₂eq) by 2022.



The tax will be imposed on fuel and production and distribution companies, which will in turn pass on the cost increase to customers. Energy prices should then rise by CAD4.42c/l (US$3.4c/l) for gasoline, CAD3.10c/l (US$2.4c/l) for propane and CAD3.91c/m³ (US$3c/m³) of gas.