On June 30, 2017, TEI filed comments on the Technical Paper on the Federal Carbon Pricing Backstop (“Technical Paper”) released by the Canada Department of Finance (“Finance”). In 2016, the Canadian government published a Federal benchmark mandating the application of carbon pricing to a broad set of emission sources throughout Canada, while providing provinces and territories flexibility to implement their own carbon pollution pricing systems. The benchmark committed to implement a Federal backstop upon any province or territory that did not have a qualifying carbon pricing system in place by 2018. The Technical Paper outlines Canada’s proposal to implement the Federal backstop in provinces that do not have a carbon pricing system or do not have carbon pricing systems that fully meet the Federal benchmark.
TEI’s comment letter stressed the importance of releasing Federal backstop legislation and regulations well in advance of the implementation date so that the Canada Revenue Agency and businesses have adequate time to learn the new rules and develop necessary compliance processes/systems. TEI also advocated moving the point of taxation from an early point in the supply chain to the point at which fuel is put into use or sold to an end user. This adjustment would substantially reduce the administrative impact on businesses across the country while still meeting the carbon pricing requirements set forth in the Federal benchmark. TEI’s submission also detailed industry-specific issues and concerns that warrant further investigation and consultation.