Federal Fuel Charge Applies in New Brunswick

Summary#

The Regulations Amending Part 1 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act and the Fuel Charge Regulations, No. 2 add New Brunswick to the list of places where the federal fuel charge applies. The change took effect on July 1, 2023, with a small transitional rule that came into force on May 1, 2023.

What it does#

• Adds New Brunswick to Part 1 of Schedule 1 of the Greenhouse Gas Pollution Pricing Act, so the federal fuel charge applies in that province starting July 1, 2023.
• Makes technical changes to the Fuel Charge Regulations so the fuel charge works correctly on the adjustment day (July 1, 2023). This includes rules about fuel already held in New Brunswick at the start of that day.
• Ensures relief and registration rules for fishers and facilities covered by provincial output-based pricing systems apply in New Brunswick the same way they do in other listed provinces.
• States that most of the amendments come into force immediately after June 30, 2023, while some registration provisions are treated as having come into force on May 1, 2023.

Who's affected#

• Fuel producers and fuel distributors that produce, deliver or sell fuel in New Brunswick. These businesses generally carry the administrative duties and pay the charge upstream.
• Fuel retailers, transporters and anyone holding fuel in New Brunswick at the start of July 1, 2023 — they may have specific obligations because of the timing rules.
• Facilities covered by provincial output-based pricing systems and fishers in New Brunswick, because existing relief and registration mechanisms are extended to the province.
• Households in New Brunswick, who may see fuel costs reflect the federal fuel charge but will receive proceeds back through the federal returns system (see below).
• The Canada Revenue Agency and the Canada Border Services Agency, which administer and enforce the fuel charge at the federal level.

Why it matters#

• For people in New Brunswick, the federal fuel charge started on July 1, 2023, which tends to raise the price of fossil fuels at the point they are sold or used.
• The federal system recycles most of the money it collects back to the province. In provinces that do not meet the federal benchmark, 90% of direct proceeds are returned to households through payments. Across those provinces, about 8 out of 10 households typically receive more back than they pay in increased costs. New Brunswick’s fuel charge proceeds are returned in the same way.
• This change is part of Canada’s national carbon-pricing approach aimed at cutting greenhouse gas emissions. The federal price increases over time (rising by $15/tonne a year in the current plan toward about $170 per tonne by 2030–2031), which is intended to encourage energy efficiency and lower-carbon choices.
• The rules include short-term technical fixes so people who held fuel at the moment the federal charge began are treated fairly and to avoid unexpected charges on that first day.