New Brunswick says it will bring forward its own output-based pricing system for greenhouse gas (GHG) emissions from large industrial emitters, including the electricity sector.
Details are still not available, but the three-page “Made-in-New Brunswick Regulatory Approach for Large Industrial Emitters”, released by New Brunswick on March 20, 2019, promises a system that meets federal criteria. It includes payment into New Brunswick’s Climate Change Fund at rates equal to the federal carbon price as one compliance mechanism. Compliance could also be achieved through reductions in emissions intensity, the trading of performance credits or the purchase of offsets.
New Brunswick is intervening in Saskatchewan’s court challenge of the constitutionality of the federal Greenhouse Gas Pollution Pricing Act, and has been granted intervenor status in Ontario’s challenge. The Greenhouse Gas Pollution Pricing Act gives the federal government authority to impose a carbon tax on fuel and an output-based pricing system on industrial GHG emissions.
For jurisdictions without a carbon pricing plan that meets federal standards, the carbon tax on fuel will be imposed beginning April 1, 2019. The federal output-based pricing system is still a draft regulation only, but the intent is to have it apply as of January 1, 2019. New Brunswick will be hit with both.
New Brunswick Premier Blaine Higgs has committed the government to meeting and exceeding the federal government’s emissions targets, but with a “made-in-New Brunswick plan.” New Brunswick has argued that unique aspects of the province’s economy, coupled with its past successes at reducing carbon emissions, render the federal backstop plan inappropriate and potentially damaging.
New Brunswick says its output-based pricing system will cover facilities that emit more than 50,000 tonnes of GHG annually. Facilities that emit more than 10,000 tonnes of GHG annually would be allowed to opt-in. It says performance standards would fall within the range of what other jurisdictions have been allowed to implement or are proposing, and would not penalize emissions-intensive, trade-exposed industries.
New Brunswick’s output-based pricing system will be in place in 2019, the province promises, and will be effective January 1, 2019, as is planned for the federal backstop.
Separately, New Brunswick introduced Bill 11 on March 20, 2019, which amends the Petroleum Products Pricing Act and the General Regulation — Petroleum Products Pricing Act (N.B. Reg. 2006-41). New Brunswick regulates the maximum wholesale and retail price of heating fuel and motor fuel.
The Bill, which the government intends to pass by April 1, 2019, will add the federal carbon tax to the maximum wholesale and retail prices, enabling retailers to maintain acceptable profit margins on sales.