Federal carbon pricing to take effect in Nova Scotia, P.E.I and Newfoundland and Labrador

The federal government will impose its fuel charge — commonly called the carbon tax — on consumers in Nova Scotia, Prince Edward Island and Newfoundland and Labrador next July.

CBC has learned Environment and Climate Change Minister Steven Guilbeault will announce Tuesday that Ottawa is imposing its federal carbon backstop on these provinces.

Those three provinces will join Alberta, Saskatchewan, Manitoba and Ontario under the federal backstop. New Brunswick, Quebec, the Northwest Territories and British Columbia will continue to oversee their own carbon pricing regimes.

The federal price will take effect on July 1 and consumer rebates — the federal government's tax-free Climate Action Incentive Payments (CAIP) — are expected to arrive within weeks of that.

Quarterly CAIP payments typically arrive in January, April, July and October — part of the federal government's plan to return 90 per cent of the money it collects through the carbon tax. A family of four is expected to receive between $240 and $400 each quarter in those Atlantic provinces where the federal backstop now applies, according to a senior government source who was not authorized to speak publicly.

Tuesday's announcement comes a day after the federal government announced an upfront grant of up to $5,000 to help low- to medium-income households switch from oil furnaces to heat pumps.

The carbon price currently sits at $50 per tonne of emissions; it's expected to rise to $65 per tonne in 2023 before reaching $170 per tonne in 2030.

In principle, carbon pricing factors in the total costs of rising greenhouse gas emissions — wildfires, heat waves, droughts and loss of property from flooding. By attaching these costs to burning fossil fuels, governments hope to make it easier and cheaper over time for businesses and consumers to choose low-carbon options.

The Liberal government calls carbon pricing the most efficient way to price pollution and drive clean innovation. 

According to the World Bank, 68 national or subnational carbon pricing initiatives cover about 20 per cent of global emissions.

While the Canadian government will impose its carbon price in these three Atlantic provinces, Guilbeault is expected to announce heavy emitters in Saskatchewan will no longer be subject to the federal government's system. Ottawa has accepted Saskatchewan's output-based pricing system.