Ottawa to increase federal carbon tax to $ 170 per tonne by 2030

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Prime Minister Justin Trudeau today released the government’s strategy to dramatically reduce greenhouse gas emissions by 2030 – and its centerpiece is a gradual increase in the federal carbon tax on fuels to $ 170 per tonne that year.
Beyond the carbon tax hike, the government is pledging $ 15 billion in new spending on climate initiatives over the next 10 years – money intended to improve the charging infrastructure of electric vehicles nationwide, tax rebates and write-offs for zero-emission vehicles and financing for home renovations, among dozens of other policies on offer.

The carbon tax will rise significantly from its current level – the tax is only $ 30 a tonne this year – as part of an effort to meet and exceed Canada’s ambitious goal of reducing carbon emissions. 30% greenhouse gas emissions from 2005 levels by 2030.

“Simply put, it would be much more difficult to reduce pollution if it were free to pollute. The principle is simple: a carbon price determines how much companies and households must pay for their pollution. The higher the price, the greater the incentive to pollute less, save energy and invest in low-carbon solutions ”, indicates the government’s new climate plan, entitled“ A healthy environment and a healthy economy ”.

The tax was already set to reach $ 50 per tonne in 2022. With this new initiative, the tax will now increase by $ 15 per tonne each year for the next eight years to wean consumers off fossil fuels in favor of cleaner energy sources. .

Higher taxes will result in higher costs for consumers when they buy gasoline. The price at the pump will increase by 37.57 cents per liter by 2030 thanks to this new plan, and the cost of light fuel oil for home heating, natural gas and propane will also increase.

To offset the rising cost of living, the government said it would continue to return most of the money raised through this program in the form of rebates.

In the current system, money is returned to individuals and families each year through the “Climate Action Incentive Payment” when they file tax returns. Starting in 2022, carbon pollution rebate payments will be distributed quarterly.

The average family of four in Ontario will receive approximately $ 2,018 per year in climate rebates by 2030.

The checks will be higher in provinces like Alberta and Saskatchewan – $ 3,242 for a family of four in Alberta and $ 3,829 for a similar family in Saskatchewan – because people in those provinces generate more emissions of carbon per capita.

The carbon tax and the court

Ottawa has imposed the carbon tax on jurisdictions that have so far refused to implement their own carbon pricing systems: Alberta, Ontario, Manitoba and Saskatchewan. The constitutionality of the federal carbon tax is still before the Supreme Court of Canada.

Trudeau dodged questions about what might happen to his government’s climate plan if the court ruled that Ottawa had no right to impose such a tax on the provinces.

“Unfortunately, some jurisdictions still don’t understand that the only way to build an economy for the future is to protect the environment at the same time. There are still places in this country that want to make it pollution-free again, ”Trudeau said.

The government is also moving forward with a new clean fuels standard – a plan to reduce the carbon intensity of fuels and energy use in Canada – but abandons efforts to put in place similar regulations on gaseous and solid fuels.

The government says it will spend $ 2.6 billion over seven years, starting in 2020-21, to help homeowners improve the energy efficiency of their homes through approximately 700,000 home improvement grants worth maximum of $ 5,000 each. The government also says it will pay for a million free EnerGuide energy assessments.

The government is also promising to invest $ 287 million over two years to continue an existing program that offers incentives to people who buy zero-emission vehicles. The program offers a rebate of up to $ 5,000 to consumers who purchase light-duty zero-emission vehicles.

Over the next four years, the government will also spend $ 964 million to upgrade the country’s electricity grid to make it more suitable for renewable energy sources.

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