Canadian Manufacturing

Five top questions about federal carbon tax and how it affects you

The Canadian Press

Cleantech Canada
Environment Operations Regulation Cleantech Energy Public Sector

Learn more about the feds' sweeping initiative

OTTAWA—Five things you need to know about how the national price on carbon affects you.

Related: Federal carbon tax rebates will exceed the cost for most people affected

1. What provinces are affected?

Only people living in Saskatchewan, Manitoba, Ontario and New Brunswick will be subject to the federal carbon tax and resultant rebate system. People who live in Yukon and Nunavut will also be subjected to the federal tax but the revenue from it will go to the territorial governments, which asked to use the federal program and will thus be allowed to decide how to spend it.


2. How much am I going to pay in a carbon tax?

The amount you pay depends on how much energy you use. Someone who has an electric furnace in a province where power is generated by coal will have higher carbon taxes than someone who uses a natural gas furnace or someone who has an electric furnace in a province where most power is generated by hydro dams. The amount will also depend on how much businesses pass on to consumers to offset their extra costs for transporting goods and powering their businesses.

If you live in Saskatchewan, Manitoba, Ontario, New Brunswick, Yukon or Nunavut, as of April 1, 2019, fossil fuels consumed for vehicles, home heating, and electricity will be assessed a $20 charge for every tonne of emissions they are known to emit. That will add about 4.42 cents to every litre of gasoline purchased, or almost $1.77 to fill a 40-litre tank. A cubic metre of natural gas will cost 3.91 cents more, or about $8 more per month for the average household.

Ottawa estimates that the annual carbon tax cost to families in Ontario in 2019 will be $244, in Manitoba, $232, in New Brunswick $202 and in Saskatchewan $403.

3. How much will my rebate be?

The rebate depends on the province you live in and the size of your family. It does not depend on your income.

Only residents in Saskatchewan, Manitoba, Ontario and New Brunswick will receive federal rebates. Residents in other provinces, which have instituted their own carbon pricing plans, will be compensated according to the policies of their provincial government.

The average payments will be $248 in New Brunswick, $300 in Ontario, $336 in Manitoba and $598 in Saskatchewan.

4. How much is Ottawa making off the carbon tax?

The government has promised “every penny” raised by the carbon tax will be returned to individuals and businesses in the province where the revenue was collected. The Climate Action Initiative intends to return 90 per cent of the revenues raised to individuals via rebates. The other 10 per cent will be returned to small and medium-sized businesses, schools, hospitals, universities and other such organizations to offset costs that cannot be passed on to individuals.

Ottawa intends to audit and publicly report on the revenues raised and rebates paid each year.

In 2019-20, officials said the carbon levy is expected to raise $1.77 billion in Ontario, $90 million in New Brunswick, $190 million in Manitoba and $310 million in Saskatchewan.

5. What about big industrial emitters? Are they paying anything?

In provinces using the federal carbon system, any company that emits more than 50,000 tonnes of greenhouse gases per year will pay the carbon tax on a portion of those emissions. The amount they’ll pay varies by industry, with the government setting a cap of 80-90 per cent of the average emissions in each sector. The tax will apply to emissions above the cap.

There will be some opportunity for companies whose emissions are below the cap to sell credits to those above the cap.

Companies have to start tracking and reporting their emissions on Jan. 1, but the actual payments won’t be assessed until mid-2020, once those reports are in and the trading of credits is completed.


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