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Federal Government Announces Greenhouse Gas Pollution Pricing Legislative and Regulatory Proposals

On January 15, 2018, the federal government released legislative and regulatory proposals for the proposed federal carbon pricing system, which will be implemented under the Greenhouse Gas Pollution Pricing Act (the “Proposals”).

The Proposals contemplate a carbon pricing system with two elements:

  1. A charge on fossil fuels. This charge would be paid by fuel producers or distributors, as opposed to being paid by consumers.
  2. A cap-and-trade style pricing system for industrial facilities with high levels of emissions. Each facility subject to this cap-and-trade system will be assigned an annual limit on its greenhouse gas emissions. Facilities that exceed this annual limit can purchase excess emission credits from other facilities, or pay a carbon price. For 2018 and 2019, the carbon pricing system applies to certain industrial facilities that emit 50 kilotonnes or more of carbon dioxide equivalent per year.

The Proposals broadly reflect the carbon pricing system proposed in the May 2017Technical Paper on the Federal Carbon Pricing Backstop. Comments will close for the draft legislative proposals on February 12, 2018 and for the regulatory framework on April 9, 2018. Comments may be provided using the links below: