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Canada ramps up its carbon price, moves to quarterly dividends

CCL Canada

CCL’s Canadian volunteers have been lobbying for improvements to Canada’s carbon pricing system.

By Cathy Orlando, CCL International Outreach Manager

A few weeks ago, Canada announced its most ambitious climate plan ever. This plan includes 64 new measures and is a cornerstone of the government’s commitment to create over one million jobs, restoring employment to pre-pandemic levels. The backbone of Canada’s new climate plan is carbon pricing akin to the policy Citizens’ Climate Lobby volunteers have been lobbying for.

In June 2018, the Greenhouse Gas Pollution Pricing Act achieved Royal Assent. Our volunteers at Citizens’ Climate Lobby Canada were pleased with the plan in 2018. They saw it as a great start and continued to lobby for improvements in the policy, such as:

  • Increasing the national carbon price past 2022 in the range of $10-20 per ton per year
  • Giving Canadians our Climate Action Incentive rebates more than just once per year, through a dividend check or a direct deposit. 
  • Working with the European Union and hopefully the U.S. to explore and implement Border Carbon Adjustments.

In December, Canada made a few key changes to its carbon pricing policy. As you will clearly see, what Citizens’ Climate Lobby advocated for and what the government plans to enact overlap significantly. Canada will now:

  • Extend our national carbon price through to 2030, rising at $15 per ton after 2022.
  • Give the proceeds to Canadian households on a quarterly basis, rather than annually, starting as early as 2022. The majority of Canadians will receive more money back than they pay in provinces where the federal system applies.
  • Explore the potential of border carbon adjustments, and work with like-minded economies—including the E.U. and Canada’s North American partners—to consider how this approach could fit into Canada’s broader strategy to meet climate targets while ensuring a fair environment for businesses.

Here’s a clip from Canadian Minister of Infrastructure & Communities, Catherine McKenna, talking about the policy’s benefits:

I was ecstatic when I read the news, and I sent the volunteers the following message: “Canada has a real carbon fee and dividend policy! Almost everything we have been lobbying for the past two years is in the new legislation introduced today. WE DID IT!”

Most importantly, this policy will significantly cut GHG emissions. Modelling by Clean Prosperity suggests the price schedule announced will allow Canada to exceed Canada’s Paris Agreement targets and get more than halfway to net zero.

The polling data for the policy looks good too. A poll from December 9, 2020, found that two-thirds of Canadians would like to see their country as either “world-leading” or “among the most ambitious” in the shift to clean energy and clean technology, according to the latest in a series of surveys conducted by Clean Energy Canada and Abacus Data.

A September 2020 poll conducted in the 905 region of Ontario by Léger and Clean Prosperity showed that Canadians favor pricing carbon when they understand how much money is returned to them. With Canadians receiving quarterly carbon dividends moving forward, their financial benefits will only become clearer and clearer.

What comes next for Citizens’ Climate Lobby Canada? We will continue to be dedicated to action and building political will for improving and protecting Canada’s national carbon pricing policy.