Ontario Premier Doug Ford yesterday announced that the government intends to introduce legislation next week that would require a referendum before any new provincial carbon pricing system could be implemented in the province. The measure is expected to be part of new legislation, the “Get It Done Act” (the Act), which is set to be tabled in the upcoming legislative session starting February 20, 2024. A carbon pricing referendum would only apply to proposed provincial measures and not the federal backstop carbon pricing system under the Greenhouse Gas Pollution Pricing Act (GGPPA) that went into effect in Ontario after the provincial government cancelled Ontario’s cap-and-trade system. Premier Ford noted that the aim of the Act is to give voters a direct say over any new provincial carbon tax, cap-and-trade system, or other carbon pricing program, and emphasized the importance of keeping costs low for residents and businesses. The Act is expected to include a host of measures that build on the government’s commitments to streamline approvals for major infrastructure projects and housing, lower costs for people and businesses, and support economic growth. Ontario’s Finance Minister Peter Bethlenfalvy (the Minister) stated that the government made a promise to fight the federal fuel charge (see our bulletin on the Supreme Court of Canada’s decision upholding the constitutionality of the GGPPA here) and that it would continue to lead by example by “giving Ontarians certainty that carbon pricing on the backs of taxpayers is not the way forward.” The Minister suggested that “[a]ny new provincial carbon tax is unacceptable for Ontario residents who are seeing their hard-earned dollars stretched further than ever.” The provincial government also called on the federal government to expand the temporary pause on the application of the federal fuel charge for home heating or to eliminate the federal carbon fuel charge entirely. For further information or to discuss the contents…
The federal government has issued its strengthened benchmark stringency criteria in line with previously announced increases to the carbon price (rising at $15/tonne per year to $170/tonne by 2030). The government previously indicated its intent to strengthen the benchmark stringency criteria for the post-2022 period in September 2020. The government intends to seek confirmation from provinces and territories on whether they intend to maintain or implement a carbon pricing system for the 2023-2030 period and assess provincial and territorial submissions against the updated federal benchmark criteria in 2022 for the 2023 to 2030 period. The 2016 benchmark continues to apply for assessments of carbon pollution pricing system stringency for the 2018-2022 period. Provinces and territories must implement (a) an explicit price-based system (i.e., (i) a carbon levy on fossil fuels, or (ii) a hybrid system comprised of a carbon levy on fossil fuels and an output-based pricing system for industry) or (b) a cap-and-trade system. Partial explicit price-based system must be designed to fully replace either the federal fuel charge or the federal OBPS. Where a province or territory implements a partial system that does not fully replace the federal fuel charge or OBPS, the corresponding federal backstop system part (i.e., fuel charge or OBPS) will apply in full in the jurisdiction. The updated benchmark sets new requirements for both explicit price-based systems and cap-and-trade systems, in the following areas: Explicit price-based systems: (i) carbon price ($65/tonne in 2023, rising $15 per year to $170/tonne in 2030); (ii) common scope; (iii) price signal (no measures to offset, reduce or negate); (iv) stringency of output-based pricing systems (OBPS) for industry; (v) restriction on OBPS and performance-based rebate approaches under a carbon levy; (vi) offset credits; and (vii) public reporting. Cap-and-trade systems: (i) maximum emissions cap (corresponding at minimum to projected emissions levels…