Fuel Charge Added in Three Atlantic Provinces

Summary#

These final regulations (SOR/2023-129) add Nova Scotia, Prince Edward Island and Newfoundland and Labrador to Part 1 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act, so the federal fuel charge (the fuel part of Canada’s carbon price) applies in those provinces. The rules take effect on July 1, 2023 and include technical, transitional steps in the Fuel Charge Regulations to make the change work smoothly.

What it does#

• Adds Nova Scotia, Prince Edward Island and Newfoundland and Labrador to Part 1 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act so the federal fuel charge applies there as of July 1, 2023.
• Declares July 1, 2023 an “adjustment day” for those provinces and adjusts some calculation rules so the charge applies correctly on that day (including rules about fuel held at the start of the day).
• Applies existing transitional and relief rules (for example, for fishers and facilities linked to provincial output-based pricing systems) in these provinces in the same way they apply in current listed provinces.
• Confirms that some registration-related provisions are treated as having come into force earlier (deemed in force on December 20, 2022).

Who's affected#

• Fuel producers and fuel distributors who operate in or deliver fuel to Nova Scotia, Prince Edward Island and Newfoundland and Labrador. They are the businesses that generally pay the fuel charge upstream.
• People or companies holding fuel in those provinces at the start of July 1, 2023, because special transitional rules determine whether a charge is owed for that fuel.
• Fishers and industrial facilities that are covered by provincial output‑based pricing systems — existing relief or registration rules available elsewhere will also apply here.
• The federal authorities that administer the charge: the Canada Revenue Agency and the Canada Border Services Agency.
• Households and businesses in those provinces, indirectly, because fuel costs and rebates are affected. Direct proceeds from the fuel charge are recycled locally through programs such as Climate Action Incentive payments.

Why it matters#

• This change brings the federal fuel charge (a price on greenhouse gas emissions from fuels) into three Atlantic provinces. That can raise the effective cost of fuels over time and change incentives for using less fuel or switching to lower‑carbon options.
• The federal government recycles most of the proceeds back in the province where they are collected (for eligible provinces, mainly through Climate Action Incentive payments), which offsets some household and business impacts.
• The addition is part of the federal effort to keep carbon pricing applied broadly across Canada and to meet national greenhouse gas reduction goals. The rules include transitional steps so the charge starts cleanly on July 1, 2023 and avoids unintended gaps or double-counting for fuel already held.