Question Period Note: Alberta pricing system for industrial sectors meets federal benchmark

• Canadians see the costs of a changing climate change all around them. A price on carbon pollution is one of the best tools we have to fight climate change and prevent these costs from growing.
• Canada’s climate plan gave provinces flexibility to price carbon pollution in a way that makes sense for their circumstances, while meeting a common standard to ensure they are stringent and effective.
• Starting January 1, 2020, Alberta is implementing a new carbon pricing system for its industrial sectors. That system aligns with the federal standard.
• The Government of Canada congratulates the Government of Alberta’s decision to continue to use carbon pricing. It is an economically efficient way to reduce carbon pollution while ensuring that Canadian industry remains globally competitive.
• The federal fuel charge will also take effect on January 1, 2020 in Alberta. This will ensure a price on all key sources of carbon pollution. All direct proceeds will go back to Alberta, and the vast majority will be returned to residents through climate action incentive payments.

• The pan-Canadian approach to carbon pollution pricing, announced by the Prime Minister in October 2016, allows provinces and territories to implement a carbon pricing system that makes sense for their circumstances and, in order to be fair and effective, meets minimum stringency requirements (the federal benchmark).
• Until May 2019, Alberta had a fuel charge (carbon levy) and an output-based pricing system for industry -- the Alberta Carbon Competitiveness Incentive Regulation.
• On May 30, 2019, Alberta cancelled its provincial carbon fuel charge. As a result, on June 13, 2019, the federal government announced its intent to implement the federal fuel charge in Alberta as of January 1, 2020.
• In fall 2019, Alberta finalized a new pricing system for industry--the Technology, Innovation, and Emissions Reduction (TIER) system. The TIER system meets the federal benchmark for the sources that it covers for 2020. It will take effect January 1, 2020, and replace the current Alberta Carbon Competitiveness Incentive Regulations.
• The Governments of Canada and Alberta released a coordinated news release December 6th, 2019. At the same time, Finance Canada published a draft regulation to enable TIER facilities to get relief from the federal fuel charge.
• Like all other pricing systems, Alberta’s system will be subject to annual review to ensure it remains aligned with the federal benchmark.

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