Canadian Legislative News

The Federal government carbon tax started on April 1 in four provinces: Ontario, Saskatchewan, Manitoba, and New Brunswick. The federal government has acted on the promise to impose a carbon tax in provinces and territories that did not have their own system in place. The new carbon pricing will increase the price of gasoline in these provinces by 4.4 cents a liter this year, reaching 11 cents a liter by 2022. In fact, gas prices went up as the new federal levy kicked in.

The proceeds from the new tax will be going directly to the residents of these provinces in the form of rebates. Funds will also go to the provinces’ cities, schools, hospitals, businesses, and Indigenous communities. For example, in Ontario a family of four will get $307, exceeding the anticipated $240 increase in fuel cost after the carbon pricing is implemented. The rebate will grow to $718 when the carbon tax reaches its peak at $50 (Can.) per ton in 2022.

The provinces affected the most are opposed to the federal government encroaching on their jurisdiction. Saskatchewan has challenged the federal government decision in court. However, the province’s Court of Appeal ruled in favor of the federal government earlier in May. The Premier of Saskatchewan Scott Moe vowed to continue the fight against the federal government over the carbon tax and indicated the province will be appealing this decision at the Supreme Court of Canada.

Ontario launched an anti-carbon tax campaign with TV ads and is also challenging the federal government decision in court. Jason Kenney, Alberta’s newly elected Premier, said his government will end their provincial carbon tax and is also challenging any decision by the federal government to impose a carbon tax in Alberta as a result.

As gasoline prices have increased across the country, a lot remains uncertain regarding the fate carbon tax and its effects. The Conservative party - currently leading in the poll a few months away from the federal election - has vowed to scrap carbon pricing and to provide the provinces the freedom to implement its own climate change plan. Liberal government is making the environment an election issue. For fleet managers, carbon pricing will increase the cost of fuel.