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Canada’s Federal Carbon Tax Takes Effect

Canada’s fuel levy under the federal Greenhouse Gas Pollution Pricing Act took effect April 1, impacting businesses and Canadian citizens in the provinces of Saskatchewan, Manitoba, New Brunswick and Ontario.  Over the past year, CPA successfully advocated to Environment and Climate Change Canada (ECCC) that composite panel mills in Ontario and New Brunswick should have the opportunity to opt into an alternative Output Based Pricing System (OBPS).  Under the OBPS, each mill would be exempt from the April 1 fuel charge, and instead, emissions’ pricing would be based on the portion of the mill’s emissions that exceeds an annual output-based emissions limit - a significantly less burdensome levy.  CPA is now working with ECCC to ensure that delays caused by the agency’s failure to set-up the online application portal in a timely manner should not be felt by CPA members through having to pay the much higher fuel charge in the interim between April 1 and the initiation of the OBPS.

Provincial governments impacted by this federal levy have been vocal in condemning the tax and are working on alternative programs that would allow mills to move out of the federal system.  CPA recently commented on a proposed output-based system for Ontario, which would serve as an alternative in the event the provincial government is unsuccessful in its two lawsuits challenging the federal Greenhouse Gas Pollution Pricing Act as unconstitutional.

For the moment, it is unclear what approach New Brunswick will take and if it will follow suit with Ontario.  With elections looming in Alberta, there is also the possibility that a shift in leadership to the Conservative Party could result in another province coming under the scope of the federal program.  See CPA Letter to ECCC, CPA Comments on Ontario OBS and Ontario Government Press Release.  More Info: Jackson Morrill and Donald Bisson

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