zero emission – GHG Accounting

Canadian Federal Carbon Pricing System Comes into Force in Backstop Jurisdictions

The Canadian federal government is committed to pricing carbon emissions and advancing the objectives of the Pan Canadian Framework on Clean Growth and Climate Change. The main components of the federal carbon pricing backstop system are set out in the Greenhouse Gas Pollution Pricing Act, which was passed in June 2018:

federal fuel charge; and
an Output-Based Pricing System for large emitters, i.e. those facilities with emissions 50,000 tonnes of carbon dioxide equivalent.

On October 23, 2018, the federal government announced that the federal carbon pricing system would come into force in 2019 in so-called “backstop jurisdictions”, i.e. those jurisdictions that have either decided not to implement a carbon price or to implement a system that does not meet federal requirements (the key requirement being a price on carbon of $20 per tonne starting in 2019, increasing by $10 per tonne annually until it reaches $50 per tonne in 2022. The backstop jurisdictions include: Ontario, New Brunswick, Manitoba, and Saskatchewan. In October 2018, the Department of Finance released details about how proceeds from the federal carbon pricing backstop will be returned directly to residents of backstop jurisdictions through the Climate Action Incentive. Both Ontario and Saskatchewan have launched constitutional challenges to the federal government’s jurisdiction to impose the federal carbon pricing scheme on the provinces. Both cases are expected to be heard in 2019. In the meantime, the federal carbon pricing system will come into force as planned.

Alberta, British Columbia, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Quebec and Yukon have either developed their own carbon pricing systems that meet federal requirements or chosen to adopt the federal backstop.

The following table summarizes the carbon pricing initiatives across all provinces and territories as of January 1^st, 2019:

Jurisdiction	Carbon Pricing Approach
British Columbia:	Carbon tax = $35 per tonne, which will increase by $5 per tonne on April 1, 2019 until it reaches $50 per tonne by 2021.
Alberta:	Carbon levy = $30 per tonne. No further increases planned at this time.
Saskatchewan:	The federal backstop will apply, in part, in Saskatchewan: · Saskatchewan will implement its output-based performance standards system on January 1, 2019 (applicable to industrial facilities that emit ≥25,000 tonnes of CO2e per year). · Federal OBPS will apply to electricity generation and natural gas transmission pipelines beginning January 1, 2019 (applicable to facilities from those sectors that emit ≥50,000 tonnes of CO2e per year, with the ability for smaller facilities that emit ≥10,000 tonnes of CO2e per year to voluntarily opt-in to the system). · Federal fuel charge to apply from April 2019.
Manitoba:	· Federal OBPS will apply from January 1, 2019 (applicable to facilities from those sectors that emit ≥50,000 tonnes of CO2e per year, with the ability for smaller facilities that emit ≥10,000 tonnes of CO2e per year to voluntarily opt-in to the system). · Federal fuel charge to apply from April 2019.
Ontario:	· Federal OBPS will apply from January 1, 2019 (applicable to facilities from those sectors that emit ≥50,000 tonnes of CO2e per year, with the ability for smaller facilities that emit ≥10,000 tonnes of CO2e per year to voluntarily opt-in to the system). · Federal fuel charge to apply from April 2019.
Québec:	Cap & Trade System – Allowance Price of CAD $20.27 (based on results of November 14, 2018 auction)
New Brunswick:	· Federal OBPS will apply from January 1, 2019 (applicable to facilities from those sectors that emit ≥50,000 tonnes of CO2e per year, with the ability for smaller facilities that emit ≥10,000 tonnes of CO2e per year to voluntarily opt-in to the system). · Federal fuel charge to apply from April 2019.
Nova Scotia:	Cap-and-trade program will start on January 1, 2019.
PEI:	The federal backstop will apply in PEI, in part: · A carbon levy on fuel will come into force on April 1, 2019. · Federal OBPS will apply from January 1, 2019 (applicable to facilities from those sectors that emit ≥50,000 tonnes of CO2e per year, with the ability for smaller facilities that emit ≥10,000 tonnes of CO2e per year to voluntarily opt-in to the system).
Newfoundland and Labrador:	Newfoundland & Labrador’s own carbon pricing plan came into force on January 1, 2019: · Provincial carbon tax rate of $20 tonne will commence on January 1, 2019. · A performance-based system for offshore and onshore industries will establish GHG reduction targets for large industrial facilities and large scale electricity generation; exemptions for certain sectors are available.
Nunavut:	· Federal OBPS will apply from July 1, 2019 (applicable to facilities from those sectors that emit ≥50,000 tonnes of CO2e per year, with the ability for smaller facilities that emit ≥10,000 tonnes of CO2e per year to voluntarily opt-in to the system). · Federal fuel charge to apply from July 1, 2019.
Yukon:	· Federal OBPS will apply from July 1, 2019 (applicable to facilities from those sectors that emit ≥50,000 tonnes of CO2e per year, with the ability for smaller facilities that emit ≥10,000 tonnes of CO2e per year to voluntarily opt-in to the system). · Federal fuel charge to apply from July 1, 2019.
Northwest Territories:	Northwest Territories will introduce a carbon tax on fuels starting July 1, 2019 = $20/tonne of GHG emissions; this will increase annually until it reaches $50/tonne.

Ontario Outlines Next Steps Of Climate Change Strategy

On November 24, 2015, the Ontario government released the province’s Climate Change Strategy which sets out the government’s near and long-term vision for a low-carbon future. Although the strategy is short on details, it provides an indication of the government’s priorities on climate change. The Ontario government has said that it will release a detailed five-year action plan in 2016, which will include specific commitments to meet near-term 2020 emissions reduction targets, and establish the framework necessary to meet targets for 2030 and 2050. Ontario has set an interim emissions reduction target of 37% below 1990 levels by 2030 and a long-term target of an 80% reduction in emissions over 1990 levels by 2050.

As articulated in the strategy, by 2050, the Ontario government envisions that its citizens will be using less energy and the energy they do use will be from low-carbon sources. Communities will be climate-resilient, complete and compact. More people will choose electric or other zero-emission vehicles and transit to get swiftly and efficiently where they need to go. Agricultural lands, natural areas and ecosystems will be better protected for the benefit and enjoyment of all. By 2050, the government sees a province that will be employing new ways to reduce waste while ensuring that more of the waste produced is reintroduced to the economy. Industries will be thriving while generating fewer or zero emissions. Finally, businesses and innovators will be creating world-leading clean technologies and products that drive new economic growth, productivity, and job creation.

Under the Climate Change Strategy, the government will:

Introduce climate legislation to establish a long-term framework for action and make the cap-and-trade program law in Ontario.
Integrate climate change mitigation and adaptation considerations into government decision-making and infrastructure planning.
Introduce changes to government operations, procurement, employee training, building retrofits and in other areas to help government move towards carbon neutrality.
Develop a coordinated approach to reduce emissions from new and existing buildings.
Reduce emissions from transportation by promoting the uptake of zero emission and plug-in hybrid vehicles.
Develop data and metrics to measure emission impacts of projects and programs including progress towards emission reduction targets. This will entail the development of tools to assess climate change risk to food production, human health, vital infrastructure, and the economy.

The government will also report on, and renew, its action plan every five years. This strategy is meant to support Ontario’s proposed cap-and-trade program and complements earlier climate initiatives, which include establishing a 2030 mid-term emissions reduction target, ending coal-fired electricity generation, and electrifying and improving Ontario’s commuter rail network.