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What Federal Carbon Tax Rise and Refunds Mean for You

A federal carbon tax hike starting next summer will increase the price of a liter of gasoline by 3.3 cents, or about $1.65 for a typical refueling.

But Canadian households will receive at least $224 more in carbon price rebates next year, covering rising fuel costs for 80% of the population, the government said.

And those payments will start going to people in Nova Scotia, Newfoundland, and PEI as they join Ontario and Prairie in a federal backstop program for states without their own carbon tax regimes.

This means BC, Quebec and New Brunswick, where local carbon pricing programs are in place, will be the only states where people haven’t received their federal refund checks. (Her low-income BC residents are eligible for state climate tax credits.)

These quarterly payments are becoming the most visible half of the federal carbon pricing system and are the backbone of efforts to fight climate change. Opponents criticize a tax that makes fossil fuels more expensive, while supporters in Ottawa tout payments to compensate families.

Brenna Walsh, energy coordinator for the Center for Ecology Action in Halifax, said: “Gas prices fluctuate by three cents regularly.

“For many Nova Scotians, a three-cent price increase is not a game-changer,” she said. “But now they know they’re going to get more money than they pay.”

A family of four in Nova Scotia will receive $248 in Climate Action Incentives (CAI) every three months starting July 1 next year, for a total of $992 annually going forward, according to figures provided by the Treasury Department.

In Ontario, CAI going to similar families rises to $976, $1,056 in Manitoba, $1,360 in Saskatchewan, and $1,544 in Alberta. $1,312 for Newfoundland and Labrador and $960 for PEI.

Nova Scotia Prime Minister Tim Houston said in a statement on Tuesday that “fuel and heating costs have reached all-time highs and many will be applying a carbon tax at this time of year”, adding that he was “extremely disappointed”. I am,” he said. Nova Scotians suffer. ”

“Let’s be clear: Nova Scotia supports action on climate change, but does not support any carbon tax on household kerosene at this time,” he said. “It also makes no sense to impose a new fuel tax when pumps are hitting record highs. cannot be seen.”

At a press conference in Ottawa, liberal MP Seamus Oregan hit back, stating: I’m tired of people talking about cold winters. ”

A Newfoundland MP defended rising carbon prices, saying, “Climate change is real and not taking a break for inflation.”

“Even if pollution has a price, it’s not money lost. That money is now coming back to you,” he said.

“This is a great system that works in Ontario, Alberta and will work in Maritimes, Newfoundland and Labrador.”

The carbon pricing system has two branches: a consumer tax on fossil fuels such as gasoline and natural gas, and an industrial carbon credit and trade system for large polluters. States must meet the minimum standards of both systems to administer their own programs, or the federal “backstop” kicks in.

Previously, the backstop applied to fuel costs in Ontario, Manitoba, Saskatchewan and Alberta. Next year he will join Nova Scotia, PEI, and Newfoundland on July 1 after their state plans were rejected for not meeting federal standards.

On that day, carbon prices will rise from $50 to $65, adding a total of 14.3 cents per liter of gasoline, 12.4 cents per cubic meter of natural gas and 17.4 cents per liter of kerosene.

Ottawa says 90% of the money raised from fuel tariffs will be reimbursed to consumers through quarterly CAI payments. People in each state receive different amounts based on their average consumption of fossil fuels. Rural people who rely on private cars can get a 10% bonus.

The remaining 10% of fuel revenues will go towards carbon reduction programs for indigenous peoples and small businesses.

Carbon tax and rebate schemes put a lot of faith in pricing to change people’s behaviour.

But reducing emissions from driving and heating won’t be easy without spending a lot on new electric vehicles or switching to electric heat pumps instead of stoves, said EAC’s Walsh. .

That’s why she’s encouraged by the announcement of $250 million in federal funding that will provide $5,000 in grants to help people switch from kerosene and natural gas furnaces to electric heat pumps.

“I’m happy to raise funds to stop kerosene,” she said. “We need to ensure that these costs are not unfairly passed on to low-income families.”

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What Federal Carbon Tax Rise and Refunds Mean for You

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