According to the Parliamentary Budget Officer of Canada, the Canadian government is expected to collect CAD2.81bn (US$2.1bn) in direct revenue in 2019-2020 from its federal carbon tax currently set at CAD 20/t (US$15/t). With the carbon tax level raised to CAD 50/t (US$38/t) in 2022-2023, revenues would then rise to CAD 8.27bn (US$6.2bn). However, Canadian households will receive 90% of the revenues from the fuel charge proceeds, i.e. more than they initially pay.
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 ("backstop" mechanism). Manitoba, Ontario, New Brunswick and Saskatchewan refused to comply with the federal plan, whereas Alberta repealed the carbon tax it had implemented in May 2019. Consequently, the federal "backstop" mechanism applies in these provinces since April 2019 (as of 1 January 2020 for Alberta). In December 2019, Canada approved New Brunswick's carbon tax proposal and Alberta's industrial carbon-pricing plan. The tax will rise by CAD10/tCO2eq (around US$7.6/tCO2eq) each year from CAD20/tCO2eq in 2019 to CAD50/tCO2eq by 2022.
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