The Government of Newfoundland and Labrador is expressing its disappointment with the Government of Canada’s decision to impose its federal carbon tax backstop on the province as of July 1, 2023. The Federal Government’s decision does not reflect the pressures that residents and businesses are facing with the rising cost of living, or Newfoundland and Labrador’s meaningful actions to address climate change and being a leader in transitioning to cleaner energy.
The Provincial Government now joins six other provinces who have received the federal carbon tax backstop. While maintaining a commitment to advance initiatives to address climate change, now is not the time for tax increases on such products as home heating fuel. As stated by Premier Furey in his September 2, 2022 correspondence to the Federal Minister of Environment and Climate Change:
“The current price signals being provided by the market are far stronger than the signals that removal of these exemptions would have provided under normal economic circumstances, and they are already generating the changes in perspective and behaviour that the Federal Government desires.”
In terms of the financial impact of this backstop, the Provincial Government will repeal its legislation and no longer collect carbon tax. Residents will receive Climate Action Incentive Payments directly from the Federal Government once the federal system is implemented in 2023.
The Federal Government has made the carbon tax on fossil fuels a key component of addressing climate change. In Newfoundland and Labrador, a carbon tax was implemented in January 2019. As a result of the Made-in Newfoundland and Labrador approach, there had been no carbon tax on home heating fuel, among a range of other uses of fuel. The Government of Newfoundland and Labrador has been vocal in opposing the Government of Canada’s removal of carbon tax exemptions, as outlined in several letters to the Federal Government.
The Government of Newfoundland and Labrador is committed to addressing climate change, and has implemented a number of climate change initiatives to lower greenhouse gas emissions, as outlined in the backgrounder below.
In addition, the province’s large-emitter output based-pricing system aligns with the Federal Government’s criteria for 2023-30, and the current provincial system will continue to apply to large industry. The Provincial Government will move forward in the coming weeks to make the necessary regulatory changes to ensure continued alignment.
Quotes
“Newfoundlanders and Labradorians are facing extremely difficult circumstances in the current global environment. It is with this in mind that I have advocated again and again for flexibility regarding the carbon tax. Today, we are disappointed to hear that the Government of Canada is imposing its federal carbon tax backstop and taxing home heating fuels, as well as other fuels. We will continue to advocate to ensure our province is treated fairly.”
Honourable Andrew Furey
Premier of Newfoundland and Labrador
“As a result of the federal carbon tax backstop, residents of the province will now see a carbon tax on home heating fuel as well as other fuels. This change will also limit the Provincial Government’s financial capacity to provide related programs to residents. Instead, rebates will go directly to residents from the Federal Government.”
Honourable Siobhan Coady
Deputy Premier and Minister of Finance
“This is disappointing news that will impact many. As a government, we are committed to addressing climate change and we have done so and will continue to, through the many initiatives and actions we have implemented to date. We will continue to work hard in all areas to achieve emissions reductions, including through annually increasing reduction targets for large industrial facilities, massive investment to power our electrical grid with clean energy, and residential, municipal, institutional, and transportation fuel switching programs.”
Honourable Bernard Davis
Minister of Environment and Climate Change
-30-
Follow us on Twitter @GovNL
Like us on Facebook
Media contacts
Meghan McCabe
Office of the Premier
709-729-3960
meghanmccabe@gov.nl.ca
Victoria Barbour
Finance
709-729-4087, 327-6152
victoriabarbour@gov.nl.ca
Debbie Marnell
Environment and Climate Change
709-729-2575, 699-9048
debbiemarnell@gov.nl.ca
BACKGROUNDER
Government of Newfoundland and Labrador Climate Change Initiatives
- Introduced a Climate Change Action Plan.
- Invested more than $13 billion in Muskrat Falls, which will result in an electricity system that will be greater than 98 per cent carbon free
- Advancing a Renewable Energy Plan that supports the local, national, and global transition to clean energy
- Created laws and performance standards for larger emitters of greenhouse gas emissions on land and offshore.
- Introduced a Made-in-Newfoundland and Labrador carbon plan.
- Bringing clean energy to public and private sector buildings.
- Reducing waste.
- Increasing access to electric vehicles.
- Helping homeowners become more energy efficient.
- Helping homeowners transition from oil to clean electricity for heating.
- Helping businesses, municipalities, and industry transition from oil to clean electricity for heating and processing.
- Investing directly in businesses and organizations that support a green economy.