432-00545 (Taxation)

The Government of Canada knows that climate change presents a threat to our long-term health and economic prosperity. Even in these challenging times, good environmental policy and addressing climate change matter.

Putting a price on pollution is an important part of Canada’s future, and the Government is doing this in a way that maintains affordability for households and ensures the competitiveness of Canadian companies. All of the direct proceeds generated by the federal pollution pricing system are returned to the province or territory of origin.  The price on pollution is revenue neutral to the federal government.

In jurisdictions that have not proposed their own fuel charge consistent with the federal benchmark criteria – Ontario, Manitoba, Saskatchewan and Alberta – the federal price on pollution is in place. In those provinces, approximately 90 percent of direct proceeds from the fuel charge are returned to residents of those provinces through Climate Action Incentive payments. Most households get more in Climate Action Incentive payments than the increased costs they face from the federal pollution pricing system. The remaining fuel charge proceeds are used to support small businesses, schools, universities, municipalities, and Indigenous groups.

Our Government will continue to take further action as required to ensure that the health of Canadians is protected, that families and businesses are supported, and that our economy remains strong in the face of uncertainty.

To this end, our Government recently proposed to increase the price on pollution through to 2030, and will continue to provide support to Canadians so that the majority of households will continue to be better off. Going forward, the federal price will continue to be revenue neutral for the Government of Canada, and we remain committed to ensuring that the federal price on pollution remains affordable, and to helping households to make investments to increase energy efficiency and further reduce emissions.

Continuing to increase the price on pollution is a central part of our proposal for a strengthened climate plan. Pollution pricing can help us achieve our environmental goals and economic ambitions at the same time.