From the Department of Finance Canada comes the announcement that the Canadian government has made regulations that cease the application of the federal fuel charge, effective April 1, 2025. The government is also removing requirements for provinces and territories to have a consumer-facing carbon price as of that date.

According to an official press release, these actions “refocus federal carbon pollution pricing standards on ensuring carbon pricing systems are in place across Canada on a broad range of greenhouse gas emissions from industry.”

The release continues: “A price on pollution for large emitters will continue to be a pillar of Canada’s plan to build a strong economy and greener future. It is a system that is fair and effective. Industrial carbon pricing is one of the most important greenhouse gas emission reduction policies in the government’s comprehensive Emissions Reduction Plan to bend the curve and meet Canada’s 2030 greenhouse gas emissions reduction target. Carbon pricing systems for industry are also designed to keep costs low to protect against competitiveness risks.”

In terms of strengthening Canada’s approach to carbon pricing for industry to ensure its continued effectiveness, the federal government intends to engage with provinces, territories, Indigenous Peoples, and stakeholders on changes to the minimum national stringency standards for carbon pollution pricing, known as the federal ‘benchmark’ criteria.

Such changes would focus the benchmark on ensuring industrial pricing systems continue to maximise emissions reductions and encourage the transition to low carbon technologies, while protecting industry against competitiveness and carbon leakage impacts. This is on the basis that improving the emissions performance of Canadian industry makes it more efficient and can support its competitiveness as Canada works to diversify its trading relationships and deepen market access, especially in jurisdictions that increasingly value lower emitting goods, such as the European Union.

The goal of the benchmark criteria would continue to be that systems are similarly stringent, fair and effective.

The benchmark review will consider opportunities to strengthen industrial carbon markets so that they deliver the incentives needed for major decarbonisation projects across industry, while creating jobs and driving investment in the technologies that will shape the clean economies of the future.

Click here to understand how removing the consumer carbon price will work and how the proceeds return mechanisms (including the Canada Carbon Rebate) will be wound down.

Newly sworn in Canadian Prime Minister Mark Carney had previously supported a carbon pricing scheme, but said during his bid for the Liberal leadership that the current policy had become ‘too divisive.’

In a Carbon Herald report on the cut in the consumer carbon tax, reporter Vasil Velev pointed out that Canada’s new Prime Minister is not seen as a climate sceptic. Rather, he is the UN Special Envoy on Climate Action and Finance and is “credited with bridging the gap between climate and finance.”

View the Prime Minister’s address as published by CBC/Radio-Canada here.

Read also Canada Invests More Than $9.5M In Innovative Carbon Management Technologies.