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Section One: PRICING CARBON POLLUTION IN CANADA
How is the Greenhouse Gas Pollution Pricing Act (GGPPA) fuel charge program administered in Canada?
The GGPPA is administered by the Canada Revenue Agency (CRA)
What fuels are impacted by the fuel charge?
The fuel charge applies to 21 types of fuel and combustible waste including gasoline, diesel, natural gas, coal, and more.
What fuel charge rates apply in jurisdictional provinces?
- April.1, 2019 – C$20/tonne in Ontario, Saskatchewan, Manitoba, and New Brunswick and July 1, 2019 – Nunavut and Yukon
- April 1, 2020 – C$30 – cost of 6.6 cents/litre on gasoline, 8.1 cents/L on diesel, and 5.9 cents/cubic metre on marketable natural gas
- Rate increase by C$10 annually until hitting C$50 in 2022
Do the federal carbon fuel charge rates apply in all provinces in Canada?
- Carbon fuel charge rates under the federal GGPPA – Part 1 regulations apply to the jurisdictional provinces implementing full backstop or certain hybrid carbon programs
- Other provinces including Quebec, British Columbia, and New Brunswick have respective programs that incorporate a carbon pricing component aligning with the federal system
How are proceeds from the carbon pricing program being allocated?
- All proceeds are returned to their jurisdictional governments and to residents through the “Climate Action Incentive” program for the year after filing their tax returns
- Proceeds support other affected non-industrial sectors – schools, hospitals, small and medium-sized businesses, colleges and universities, municipalities, not-for-profits, and Indigenous communities
How can my facility mitigate the carbon charges - opportunities?
- GGPPA – Part 1 provides for 12 types of registrations including industrial emitters and road carriers
- Certain business activities require mandatory registration (cross-border road carriers) while most are voluntary (emitters registered as OBPS voluntary participants) – registration certificates allow for fuel tax exemptions from suppliers at source
- Certain sectors – such as greenhouses and farms are eligible for partial relief (80%) through fuel charge exemption certificates
- All registration and fuel charge administration is completed through the Canada Revenue Agency (CRA)
- Facilities located in provinces not covered under the GGPPA fuel charge regulations – programs are offered through provincial initiatives (i.e. Quebec)
Section Two: CANADIAN CARBON PROGRAMS
DOSSIER: Canadian federal, provincial, and territorial carbon pricing initiatives
On Oct. 23, 2018, the Canadian federal government announced which provinces and territories submitted carbon pricing plans that comply with Ottawa’s pan-Canadian Framework and those who would face either a full or partial imposition of the ‘backstop’ pricing plan.
The following is a summary of all the carbon pricing actions currently implemented or set forth by Canadian provinces, territories, and the federal government.
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Section Three: REPORTING GREENHOUSE GAS EMMISIONS
What is the federal Greenhouse Gas Reporting Program (GHGRP)?
- The Greenhouse Gas Reporting Program (GHGRP) collects information from individual facilities relating to their annual greenhouse gas emissions (carbon emissions)
- Based on facility production methods and sectors
- It was established in March 2004 by Environment and Climate Change Canada (ECCC) under the authority of section 46 of the Canadian Environmental Protection Act (CEPA)
What are the key objectives?
- Provide Canadians with consistent information on greenhouse gas emissions
- Inform greenhouse gas emission estimates in the National Greenhouse Gas Inventory by industrial sectors to support regulatory initiatives of the federal government
- Canada’s National Greenhouse Gas Inventory is a comprehensive inventory covering all sources and sinks of greenhouse gases caused by human activity in Canada
Who must report under the federal Greenhouse Gas Reporting Program?
- All industrial facilities across Canada that emit 10, 000 tonnes per year or more of greenhouse gases (GHG), in carbon dioxide equivalent units (Co2 eq), must submit annually for the calendar year identified in the notice published annually by the program
- For the 2017 calendar year, 1 622 facilities reported their greenhouse gas emissions to the ECCC
- Reporting is mandatory with associated penalties for non-compliance
What is considered a “facility” under the federal Greenhouse Gas Reporting Program?
Facility includes all buildings, equipment, structures, onsite transportation machinery, and stationary items that are:
- Located on a single site, on multiple sites or between multiple sites
- Owned or operated by the same person(s); and
- Function as a single integrated site
Key criteria are considered:
- If sites are contiguous and owned or operated by the same company, they may be considered as an integrated facility
- If sites are not contiguous, yet the multiple sites are dependent upon each other and they share the same activity type (determined by North American Industry Classification System (NAICS) code), they may also be considered as an integrated facility
What constitutes 10,000 tonnes in carbon dioxide equivalent units?
- Stationary combustion – sources can include natural gas, propane, and diesel*
- Biomass and on-site electricity generation activities are also reported
- Natural gas (Boilers/Cogen): ˜ 210,000 GJ/year
*Regulations are published yearly in the Greenhouse Gas Reporting Requirements – Canada.ca
Starting in 2020, my facility is required to report under the federal Output-Based Pricing System (OBPS) Regulations. Is this the same as a GHGRP report
- No – the OBPS report is separate from the GHGRP report, although certain emission and facility contact data are required by both initiatives
- A GHGRP report submission is always required if the facility meets the GHGRP reporting criteria – regardless if the facility is covered under a carbon program or not
- There are also reporting requirements that are unique to each reporting obligation, reflecting the different objectives and scope of the GHGRP and the OBPS
Are facilities from the greenhouse sector required to report their greenhouse gas emissions under the federal Greenhouse Gas Reporting Program?
- Yes – The GHG reporting requirements apply to any facility with annual GHG emissions exceeding 10 tonnes (in CO2 equivalent) emissions annually
- Sources of emissions that would apply to facilities in this sector include mainly combustion fuels and/or biomass burned on-site to operate the greenhouse of farm
- Stationary combustion includes sources to operate boilers, heat buildings, barns and in transportation machinery or equipment (e.g. farming equipment, vehicles not licensed for public roads)
