Canada’s Carbon Price: Catalyst in Political Debate and Climate Change Action


Since 2019, a national price on pollution has been instituted in Canada, sparking a continuing political debate. The Opposition Conservatives have made it clear that this issue will be a crucial point of contention in the forthcoming election.

The policy in question is the Carbon Price, created under the Greenhouse Gas Pollution Pricing Act enacted by Parliament in 2018. This institutionalized the legal framework allowing the federal government to demand that provinces and territories implement a levy on greenhouse gas emissions or adhere to the federal system.

The policy comprises two main parts. The first, the fuel charge, implicates 21 different sorts of fuel, including flammable waste, and is paid primarily by the fuel distributor; the cost trickles down to consumers via their car’s gas, household gas bills, and the like.

The second element, labeled the “output-based pricing system,” obligates companies with substantial carbon emissions, such as oil producers or gas power plants, to pay a carbon tax based on their actual emissions rather than their fuel consumption.

This policy is currently being employed by the British Columbia, Quebec, and Northwest Territories, with other provinces integrating it into their provincial systems or adopting the federal system alone.

Carbon pricing is intended to curb excessive burning of fossil fuels by increasing their cost, thereby encouraging reduced usage and more sustainable habits.

The cost of carbon pricing is calculated on a per-tonne basis, which is increasing annually under a pricing model that began at $20 per tonne in 2019 and will escalate to $170 by 2030.

To offset any financial disadvantage incurred by households due to the increased fuel prices, the federal government introduced the carbon price rebates or “climate action incentive.” It rewards households that reduce their greenhouse gas emissions, with 80% of homes receiving more in rebates than they pay in carbon tax.

The elusive effect of carbon pricing on Canada’s emissions remains the pinnacle concern, with no definitive answer to date, as carbon pricing is not the sole climate policy deployed by the nation.

Looking at the international scene, no less than 39 countries and 33 subnational jurisdictions, encompassing about 23% of global greenhouse gas emissions, currently endorse carbon pricing.

This policy, as pioneering as it is contentious, continues to reshape Canada’s approach to environmental conservation and climate change, forming a political battlefield on which future elections will undeniably be fought.


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