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Carbon and Greenhouse Gas Legislation in New Brunswick

September 2019


Carbon & Greenhouse Gas Legislation - New Brunswick


Climate change plans

As of 2019, the federal carbon pollution pricing system and the federal Output-Based Pricing System (OBPS) apply to New Brunswick. Both fall under the federal Greenhouse Gas Pollution Pricing Act (the Act). Greenhouse gas (GHG) emissions are taxed at $20 per tonne in 2019, increasing to $50 per tonne in 2022.

The Act has the following features:

  • For larger industrial facilities, the OBPS for emissions-intensive trade-exposed industries applies. This covers facilities emitting 50,000 tonnes of carbon dioxide (CO2) equivalent per year or more.
  • Smaller facilities that emit 10,000 tonnes of CO2 equivalent per year or more may voluntarily opt in to the system over time.
  • A charge applied to fossil fuels, generally paid by registered distributors (fuel producers and distributors), as set out in Part 1 of the Act, applies.

Large emitters in New Brunswick will report their 2019 emissions in the spring of 2020.

New Brunswick is planning on introducing its own framework to replace the federal carbon pollution pricing system and the OBPS. The provincial government has also challenged the constitutionality of the Act.

Through its Made-in-New-Brunswick Regulatory Approach for Large Industrial Emitters, the provincial government plans to amend the New Brunswick Climate Change Act and to develop regulations which would apply to facilities that emit more than 50,000 tonnes of GHG each year. It would also provide the ability for facilities emitting more than 10,000 tonnes of GHG annually to opt in. The New Brunswick approach is expected to

  • follow the federal price schedule of $20/tonne in 2019, increasing to $50/tonne in 2022
  • allow emitters to purchase offset credits
  • allow for the purchase of performance credits from facilities outperforming performance standards, which will be bankable and tradable

These proposed changes likely will not be enacted until the fall of 2019.

Climate Change Act

In 2018, the Climate Change Act (the Act) came into force. The Act sets out the following GHG emission output limits in New Brunswick:

  • 14.8 megatonnes in 2020
  • 10.7 megatonnes in 2030
  • 5 megatonnes in 2050

Further, the Act:

  • Institutes a levy on transportation fuels achieved by transferring a portion of the provincial fuel tax to the Climate Change Fund. The levy will be invested back into climate change initiatives.
  • Grants the Minister of Environment and Local Government authority to enter into agreements with the federal government to provide for the federal regulation of New Brunswick’s large industrial emitters and to ensure revenue derived therefrom is returned to the province’s Climate Change Fund.
  • Grants the Minister of Environment and Local Government authority to establish a provincial offsets regulation to further incentivize emission reductions in sectors that will not be regulated by carbon pricing.
  • Institutes annual reporting requirements on the Climate Change Action Plan and the Climate Change Fund to ensure transparency and accountability.

Although the government had intended to avoid direct taxation on consumers by transferring a portion of the provincial fuel tax to the Climate Change Fund, as of April 2019, consumers in New Brunswick are subject to federal carbon tax rates on gasoline, diesel, heating oil and propane.

Climate Change Action Plan

In December 2016, New Brunswick released the Transitioning to a Low-Carbon Economy – New Brunswick’s Climate Change Action Plan (the Plan). In December 2017, the provincial government issued an update to the Plan. The Plan seeks to:

  • Reduce total GHG emission outputs to 14.8 Mt by 2020, 10.7 Mt by 2030, and 5 Mt by 2050 – these targets have been implemented in the Climate Change Act.
  • Phase out coal as a source of electricity by 2030.
  • Make the government carbon neutral by 2030.
  • Phase out the use of fuel oil for heating publicly funded buildings and replace it with low-carbon fuels such as wood pellets, natural gas, biomass and solar energy.
  • Require energy performance identification (benchmarking and labelling) for all publicly funded new construction and major building renovations.
  • Extend the reporting requirements to facilities that emit at least 10,000 tonnes of GHG emissions per year and management requirements to facilities that emit at least 25,000 tonnes of GHG emissions per year.
  • Subject large industry that emit over 50,000 tonnes of GHG annually to emissions limits in the form of output-based performance standards which will be implemented and administered by the federal government.

Since the Plan’s release, the provincial government has established a committee of Cabinet dedicated solely to the issue of climate change, chaired by the premier, to oversee the implementation of the action plan.

Electricity

The Renewable Portfolio Standard requires that the provincial power authority secure 40% of its energy acquired within the province from renewable sources by 2020. 

How does this policy compare with other regions in Canada?

View infographic

To discuss how to best manage emissions compliance, contact our Climate Change team.

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