Market Snapshot: Carbon pricing policies are active or proposed in provinces generating more than 80% of Canada’s GHG emissions

Release date: 2016-04-01

Alberta, Manitoba, and Ontario recently announced new carbon pricing strategies to reduce greenhouse gas (GHG) emissions. These provinces join British Columbia and Quebec, where carbon pricing is already in effect. If all of the proposed initiatives are implemented, carbon pricing policies will exist in provinces accounting for more than 80 per cent of Canada’s GHG emissions and 90 per cent of Canada’s population.

In November 2015, Alberta announced its Climate Leadership Plan, which focuses on four key areas:

• Phasing out coal-generated electricity completely by 2030 and developing more renewable energy
• Implementing a new carbon price on GHG pollution for 78 to 90 per cent of provincial emissions
• A legislated oil sands emission limit of 100 MT in any year, and a $30/tonne carbon price for all emissions
• Reducing methane emissions by 45 per cent from Alberta’s oil and gas operations by 2025

Manitoba announced in December 2015 that it will join Ontario, Quebec, and California in introducing a cap and trade system to reduce GHG emissions. Manitoba also signed a Memorandum of Understanding with Quebec and Ontario to link their cap and trade programs under the Western Climate Initiative, further strengthening North America’s largest carbon market.^Footnote 1 Manitoba will aim to reduce GHG emissions by one-third by 2030 and be carbon-neutral by 2080.

Also in December 2015, Ontario released its Climate Change Strategy, which sets out its plan to reduce GHG emissions to 80 per cent below 1990 levels by 2050. To achieve this, Ontario has established targets for 2020 and 2030 (15 per cent and 37 per cent below 1990 levels, respectively). Ontario is almost two-thirds of the way to achieving its 2020 goal.

In February 2016, Ontario passed Bill 172 – the Climate Change Mitigation and Low-carbon Economy Act 2016, which sets GHG targets and establishes the framework for Ontario’s cap and trade program. This program would auction tradable emissions allowances^Footnote 2 and generate $1.9 billion in provincial revenues, which would be directed toward funding green projects. The program is not expected to increase electricity costs, but natural gas bills could increase by $5 per month for the average household and gasoline prices could increase by 4.3 cents a litre.^Footnote 3

Date modified:

2023-11-28