Carbon pricing: What today’s increase could mean for you

OTAWA –

The national price of pollution will increase today by 15 dollars per ton. Answered below are some questions about what this might mean for you.

Who pays the carbon price?

Canada has two different carbon pricing programs: one for big industry, where companies pay the price for a portion of their actual emissions, and a consumer carbon tax that applies to fossil fuel purchases. The consumer tax affects individuals, small and medium-sized businesses, First Nations, as well as public sector operations such as hospitals, universities, schools and municipalities.

The April 1 price change affects the consumer tax, which applies in all provinces and territories except British Columbia, Quebec and the Northwest Territories.

Both BC and the Northwest Territories have their own very similar carbon charges for consumers. Quebec has a cap-and-trade system that is quite different, but Ottawa considers it equivalent to what the federal price costs and reduces in terms of emissions.

What does the carbon consumption tax apply to?

The fuel charge is added to the price of more than 20 different fuel sources that produce greenhouse gas emissions when burned for energy, including gasoline, propane, diesel and natural gas. The additional cost of each fuel depends on how many greenhouse gases are produced when that fuel is burned to produce energy.

A liter of diesel produces more carbon dioxide than a liter of gasoline, for example, so the carbon price is higher in a liter of diesel than in gasoline.

What effect will this increase have on fuel prices?

The impact will be similar in all provinces except Quebec.


Gasoline: Going from $65 per ton to $80 means the carbon price per liter of gasoline will now be 17.6 cents per liter, 3.3 cents per liter higher than before. That means filling a 50-liter tank from empty will cost about $8.80 in carbon price, about $1.65 more than before.


Diesel: Starting today, the price of a liter of diesel will include 21.39 carbon cents, up from 17.38 cents.


Propane: The price of propane will now include 12.38 cents per liter in the carbon price, up from 10.08 cents. Filling a standard 20-pound barbecue propane tank will cost about $2.20 in carbon, compared to $1.78 last year.


Natural gas: On average in Canada, households use about 2,280 cubic meters of natural gas per year, primarily for heating. At $80 per ton, the carbon price will add 15.3 cents per cubic meter of natural gas, up from 12.4 cents previously. That equates to an annual carbon price bill for natural gas of about $347 on average, compared to $282 last year.


Food and clothing and other goods: Carbon pricing has indirect costs, as companies paying the price increase the cost of their goods and services to keep up. The amounts vary by industry, but Statistics Canada estimated that carbon pricing increased the price of food by about 0.3 per cent and the price of clothing by two per cent since its inception. The effect of the latest increase is yet to be determined.

How much will the Canada Carbon Rebate help?

Provinces that pay the federal carbon price also receive the federal rebate. BC and the Northwest Territories, in turn, offer their own rebates that are slightly different.

BC’s rebate, for example, is income-based and about a third of all households in the province do not qualify to receive it.

The federal refund, which is deposited or mailed four times a year, is divided among households based on family size, not income. Each year, Environment and Climate Change Canada calculates the expected revenue from carbon pricing in each province and, by law, has to return 90 per cent of that revenue in rebates. Part of the remaining 10 percent goes to increasing rebates for rural residents by 20 percent. Some of the rest is intended to help businesses become more fuel efficient, but those programs have been slow to roll out. Most companies have received nothing in the five years since carbon pricing began.

Discounts increase as the price increases, although many households in the Atlantic provinces will not see an increase this year. This is because almost a third of households in these provinces use fuel for heating and since October they have been exempt from paying the carbon price. That reduction is reflected in the reimbursement amounts.

Rebates vary because carbon price totals vary based on things like heating use and driving distances. Alberta and Saskatchewan, for example, typically use more natural gas for home heating than Ontario or Manitoba.

The next refund payment is due April 15. Here are the quarterly amounts, by province, for an individual, a couple and a family of four. In single-parent households, the first child receives the same treatment as the spouse in terms of the amount of the refund.

Rural residents, who tend to travel longer distances, will receive 20 percent more.

Yukon and Nunavut pay the federal carbon price, but have their own unique rebate programs.


Alberta:

Single: $225 Couple: $337.50 Family of four: $450


Saskatchewan:

Single: $188 Couple: $282 Family of four: $376


Manitoba:

Single: $150 Couple: $225 Family of four: $300


Ontario:

Single: $140 Couple: $210 Family of four: $280


New Brunswick:

Single: $95 Couple: $142.50 Family of four: $190


New Scotland:

Single: $103 Couple: $154.50 Family of four: $206


Prince Edward Island:

Single: $110 Couple: $165 Family of four: $220*

*All PEI households are considered rural and rebates for all include the 20 percent supplement.


Newfoundland and Labrador:

Single: $149 Couple: $223.50 Family of four: $298


This report by The Canadian Press was first published April 1, 2024.

Leave a Comment