The Canadian government plans to increase the carbon tax by CAD15/t (US$11.7/t) every year starting in 2023: the carbon tax should thus rise from CAD50 (US$39/t) in 2022 to CAD170 (US$133.1/t) in 2030. In turn, Canadian households will be granted carbon tax rebates, which will increase until 2030.
To achieve emissions reduction objectives, Canada has announced a national carbon price floor, requiring that all provinces have either a carbon tax or a cap-and-trade system by 2018. The price floor was set at CAD20/t (US$16/t) in 2020 and should increase linearly to reach CAD50/t (US$39/t) in 2022. In 2018, the federal government announced that it would impose a CAD20/t (US$16/t) "backstop" carbon tax on fuels in the provinces and territories that have no adequate carbon pricing plans and refused to adopt the country-wide CO2 pricing system.
In November 2020, Canada unveiled a new plan to reach net-zero emissions by 2050. The new regulation would force the federal government to create interim emissions reduction targets every five years until 2050. In addition, the bill will create an outside advisory board that would provide advice to the government on settings targets and the best sectoral strategies for achieving net-zero. The text is yet to be approved by the parliament. The fastest-growing source of emissions in Canada is the exploitation of oil sands.
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