Federal Government

The Government of Canada on Saturday published an extra edition of Canada Gazette, Part II to eliminate the “consumer-facing” carbon price (i.e., the federal fuel charge), effective April 1, 2025. The change was originally announced by new Prime Minister Mark Carney on Friday as his first official act. The new regulations amend the Greenhouse Gas Pollution Pricing Act (GGPPA) and related regulations. This bulletin briefly summarizes the amendments and highlights key aspects of the associated Regulatory Impact Analysis Statements (RIASs). The amendments most consequentially set the rate of charge applicable after March 31, 2025 set out in Table 5 of Schedule 2 to the GGPPA to “zero” dollars for all 22 types of fuel. The rates previously set out in that table represented a carbon price of $80 per tonne in 2024-25. The Governor in Council (i.e., the Governor General acting on the advice of Cabinet) has the authority to set the fuel charge rates to zero under section 166(4) of the GGPPA. The government has also made related amendments to the Fuel Charge Regulations (particularly around removal of registration requirements after March 31, 2025) and coordinating amendments to the Output-Based Pricing System (OBPS) Regulations. The RIASs note that: The government estimates that the elimination of the fuel charge will lead to a loss of 12.57 Mt cumulative GHG emissions reductions from 2025 to 2030 (p. 12). The monetized cost of foregone emissions reductions over the 2025-2030 period of the elimination of the fuel charge is estimated to be about $3.83B (in 2024 dollars, discounted at 2% to 2025-26), using social cost of carbon figures for 2025 to 2030 (p. 13). The elimination of the fuel charge increases Canada’s GDP by 0.5% in 2030 (p. 14). The total welfare gains, not accounting for the social cost of carbon, for households would be equivalent to a 0.3% increase in household consumption in…

Prime Minister Trudeau yesterday released new mandate letters to cabinet ministers including the Ministers of Environment and Climate Change and Natural Resources, and the Deputy Prime Minister and Minister of Finance. Every minister has been directed to implement the United Nations Declaration on the Rights of Indigenous Peoples (read our earlier bulletin here). This bulletin summarizes key climate, energy, and Indigenous objectives highlighted in the ministers’ new mandates: Environment and Climate Change Minister Guilbeault’s mandate letter situates the minister as the key driver of the federal government’s Climate Plan, delivering on policy and fiscal measures provided in the Strengthened Climate Plan and adopting measures to achieve net-zero emissions by 2050. Key objectives include: Implement the Canadian Net-Zero Emissions Accountability Act, and bring forward an updated Emissions Reduction Plan to achieve a 40 to 45 per cent reduction in emissions by 2030 from 2005 levels. Cap oil and gas sector emissions at current levels and ensure that the sector makes an ambitious and achievable contribution to meeting the 2030 climate goals. Develop a plan to reduce economy-wide methane emissions consistent with the Global Methane Pledge and require through regulations the reduction of oil and gas methane emissions in Canada by at least 75 per cent below 2012 levels by 2030. Support the global effort to phase out coal-powered electricity and the mining of thermal coal, and ban thermal coal exports from and through Canada no later than 2030. Work with industry, labour, and other stakeholders to develop a regulated sales mandate that at least 50 per cent of all new light-duty vehicle sales be zero emissions vehicles in 2030, toward achieving Canada’s mandatory target of 100 per cent by 2035. Introduce a Clean Electricity Standard to achieve a net-zero clean electricity grid by 2035. Finalize Canada’s first National Adaptation Strategy in 2022. Work with relevant ministries,…

Carney Government Eliminates Consumer Carbon Price

Prime Minister Releases New Mandate Letters For Cabinet