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Things to know about carbon price backstop

RAFE WRIGHT LOCAL JOURNALISM INITIATIVE rafe.wright@saltwire.com @wright542 Rafe Wright is a Local Journalism Initiative climate change reporter, a position funded by the federal government

Three Atlantic Canadian provinces can expect to see the price of gas and home heating oil take a steep increase in 2023.

On Nov. 22, the federal government announced the federal carbon price backstop will now apply to Nova Scotia, Newfoundland and P.E.I. starting July 1, as these provinces did not submit carbon reduction systems that met federal criteria aimed at reducing greenhouse gas emissions. New Brunswick has its own approved carbon pricing

In August 2021, each province and territory was asked to provide an updated carbon reduction plan to meet the tightening requirements laid out by the federal government to meet its goal of net-zero carbon emissions. The deadline for the new plan was September 2022.

The federal government determined these province’s plans did not meet the full benchmark criteria. As a result, federal implementations will be put in place to ensure carbon reduction goals are met.

Here are a few things you should know about the federal carbon price backstop, which will take in July 2023, as announced in a media briefing on Nov. 22:

• The tax on carbon will increase from $50 per tonne to $65 per tonne in 2023.

• The price of gasoline in P.E.I. will increase by three cents per litre. The full carbon price increase on heating oil will be 17.9 cents per litre.

• Proceeds from the federal system will continue to be returned directly to territorial governments at their request, as will federal outbased pricing system proceeds in P.E.I.

• In provinces where the federal fuel charge applies, 90 per cent of pollution pricing proceeds, net of the Farmers Tax Credit, are returned directly to households through Climate Action Incentive payments.

• Starting in July, each of these provinces will receive three quarterly rebate cheques through these incentives.

• In Newfoundland, families of four will receive $328.

• In Nova Scotia, families of four will receive $248.

• In P.E.I., families of four will receive $240.

• The reason for these variations is differences in oil usage and varying industry in these regions.

• The remaining 10 per cent of fuel charge proceeds will be used to support small businesses and Indigenous groups. It is not clear as of Nov. 22 what these proceeds will specifically go towards.

• Farmers can apply to receive a refundable tax credit, related specifically to the use of natural gas and propane to help offset the cost of pollution pricing.

• Greenhouse operators receive a rebate worth 80 per cent of the costs they pay.

• The federal output-based pricing system for industry will continue to apply in P.E.I., which did not propose a carbon pricing system for industry.

• Federal out-based pricing systems will stay in place until December 2026, at which time an interim review will be held to ensure the federal carbon reduction benchmarks are being met.

• The federal price of carbon will reach $170 per tonne in 2030.

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2022-11-30T08:00:00.0000000Z

2022-11-30T08:00:00.0000000Z

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