Greenhouse Gas Pollution Pricing Act - Canada federal fuel charge

The Pan-Canadian Approach to Pricing Carbon Pollution requires all Canadian provinces and territories to have a carbon pricing system in place that aligns with minimum national stringency standards. A federal carbon pricing backstop system comes into effect, in whole or in part in any province or territory that requests it or that does not have a price on carbon in place that meets the minimum standards. The federal backstop system consists of two components: a regulatory charge on fuels and a baseline-and-credit ETS for emissions-intensive and trade-exposed industrial facilities called the Output-Based Pricing System (OBPS). All direct proceeds from the federal system are returned to the province or territory of origin.

On March 14, 2025, the Government of Canada announced that it will be removing the fuel charge effective April 1, 2025, by setting all fuel charges rates to zero. The fuel charge no longer needs to be reported or paid on all types of fuel and combustible waste in listed provinces in respect of activities after March 31, 2025.

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