Federal Carbon Pricing Program - Large Volume Customers

In accordance with the Greenhouse Gas Pollution Pricing Act (GGPPA), the federal government implemented a carbon pricing program in Ontario. This Federal Carbon Pricing Program (FCPP) is comprised of two components:

  1. An output-based pricing system (OBPS) for industrial facilities producing greenhouse gas (GHG) emissions above a certain threshold; and
  2. A federal carbon charge applied to fossil fuels (including natural gas).

The federal carbon charge assigns a value to each tonne of GHG emissions, measured in carbon dioxide equivalent (tCO2e). The federal carbon charge is currently 7.83 cents/m3 (effective April 1, 2021). This will continue to increase annually each April.

2019 – 2022 Federal Carbon Charge Rates for Marketable Natural Gas

Year

$/ tCO2e

cents/m3

2019

$20

3.91

2020

$30

5.87

2021

$40

7.83

2022

$50

9.79

The federal carbon charge is included on customers’ bills, with the exception of customer facilities that have an exemption certificate issued by the federal government. The federal carbon charge shows as a separate line item when applicable. Eligible participants under the GGPPA may be required or permitted to register with the federal government in order to receive full or partial exemption from the federal carbon charge.

The Government of Canada has introduced the Climate Action Incentive Fund (CAIF) for small-medium enterprises, municipalities, universities, schools, hospitals, and not-for-profit organizations. Eligible recipients may access funding for projects to decrease energy usage, save money, and reduce carbon pollution.

Greenhouse Operators

Greenhouse operators may be eligible to obtain 80 percent relief of the federal carbon charge, using an exemption certificate, when marketable natural gas used exclusively in the operation of certain commercial greenhouses is delivered by a registered distributor (e.g. Enbridge Gas).

To allow Enbridge Gas to process your exemption (such that only 20 percent of the federal carbon charge will apply), please complete the following steps:

  1. Confirm your exemption eligibility as a greenhouse operator by reviewing the definitions within the GGPPA and the Fuel Charge Regulations :
    The term "greenhouse operator" means a person that carries on a business of growing vegetables, fruits, bedding plants, flowers, ornamental plants, tree seedlings, medicinal plants or other plants in eligible greenhouses with a reasonable expectation of profit .

    The term "eligible greenhouse" means a greenhouse all or substantially all of which is used for the growing of vegetables, fruits, bedding plants, flowers, ornamental plants, tree seedlings, medicinal plants or other plants.

    1. Review the fuel use for each account you list on your Facility Declaration Form to ensure it meets the definition of eligible greenhouse activity .
      The term "eligible greenhouse activity" means the use of a qualifying greenhouse fuel (as defined below) to heat an eligible greenhouse or to supplement carbon dioxide in an eligible greenhouse in order to grow or produce plants.

      The term "qualifying greenhouse fuel" means a type of fuel that is marketable natural gas (as defined in Section 3 of the GGPPA) or propane.

  2. Complete Form L404 and Enbridge Gas’ Facility Declaration Form and submit to     uglcontractingteam@uniongas.com . The applicable exemption will be applied the first day of the following month in which Enbridge Gas receives the required documents. As stated in Form L404, it is the responsibility of the greenhouse operator to provide correct and complete information .

  3. . Review and understand your ongoing obligation  under Part 5, Section 7 of the Fuel Charge Regulations , which states that if a qualifying greenhouse fuel that is delivered by a registered distributor is used by the greenhouse operator otherwise than in eligible greenhouse activities, the greenhouse operator must pay a charge in respect of the fuel to the federal government.

 

Ontario Emissions Performance Standards Program

Ontario’s Emissions Performance Standards (EPS) program regulates greenhouse gas emissions from large industrial facilities by setting an emissions standard that the facility must meet each year. A facility that does not meet the standard will be responsible for paying to cover the portion of its emissions that exceed the standard.

On Sept. 21, 2020, the Government of Ontario announced that the federal government has accepted the Ontario EPS program as an alternative to the OBPS.

On Dec. 23, 2020 the federal government issued a Notice of Intent to amend the OBPS Regulations to reflect the implementation of Ontario’s EPS program as an alternative to the OBPS. The timeline for the transition from the OBPS to the EPS has not been released. Enbridge Gas is working to understand the transition plan and will communicate further once we have more details. At this time, the federal OBPS remains in effect in Ontario.

More information can be found at the following:

Website: https://www.ontario.ca/page/emissions-performance-standards-program
Email:  EPSApplications@Ontario.ca
Phone: 1-888-217-3326

Output-Based Pricing System (OBPS)

On Jan. 1, 2019, the OBPS component of the FCPP came into effect in Ontario to address competitiveness risks for industrial facilities that are emissions intensive and trade exposed. An industrial facility may be required to participate or may voluntarily opt-in to the OBPS depending on the facility's total emissions.

A mandatory participant under OBPS is an industrial facility that:

  1. Reported total emissions above 50,000 tCO2 (about 26 million cubic metres of natural gas, assuming natural gas is the only source of emissions) in 2014 or subsequent year to the Greenhouse Gas Reporting Program (GHGRP);
  2. Undertakes as its primary activity, an activity which has an output-based standard specified; and
  3. Is located in a province or territory subject to the FCPP (i.e. Ontario).

voluntary participant under OBPS is an industrial facility that:

  1. Reported total emissions between 10,000 – 50,000 tCO2 (about five million to 26 million cubic metres of natural gas) in 2017 or subsequent year to the GHGRP;
  2. Undertakes as its primary activity, an activity which has an output-based standard specified; and
  3. Is located in a province or territory subject to the FCPP (i.e. Ontario).

Under the OBPS, registered facilities will have a facility-specific annual emission limit which is based on the relevant output-based standard for the product it produces and its level of production. A facility registered under the OBPS and with the Canada Revenue Agency (CRA) will be able to purchase fuel free of the federal carbon charge and will only be responsible for paying the carbon charge on the portion of its emissions that exceed its annual emission limit.

For OBPS eligibility requirements, rel="noopener noreferrer" refer to the Registration Notice provided by the federal government.

OBPS Registration

Before registering, review the GGPPA and OBPS Regulations to determine registration requirements. To register under the OBPS, a facility must register through a two-step process with the federal government.

  1. Register with Environment and Climate Change Canada (ECCC) to obtain a covered facility certificate. rel="noopener noreferrer"
  2. Register with the Canada Revenue Agency (CRA) to receive an rel="noopener noreferrer" exemption certificate.

Federal Registration Support – Additional Links & Contact Information

OBPS

For questions or comments on the federal OBPS, please email ec.tarificationducarbonecarbonpricing.ec@canada.ca.

For questions or comments on registration under the federal OBPS, please email ec.stfr-obps.ec@canada.ca or call 1-833-849-9160.

rel="noopener noreferrer" CRA Registration

Should you require further assistance, the federal government has provided a list of  regional contacts.

Technical Questions on Part 1 of the GGPPA (Ontario): 1-866-667-9851

OBPS GHG Reporting Requirements

Businesses registered under OBPS are responsible for submitting an annual GHG emissions report. For more information on the quantification, reporting and verification requirements for a registered facility, refer to the following documents:

Registration with Enbridge Gas

In order to receive full or partial exemption from the customer component of the federal carbon charge you must provide Enbridge Gas with confirmation of your exemption. Enbridge Gas' facility-related carbon charges will be applicable to all customers, as these charges are costs that Enbridge Gas will incur to deliver natural gas to you.

Customers eligible for exemption under the GGPPA must complete and submit the following materials to uglcontractingteam@uniongas.com.

  1. Completed  Facility Declaration Form
  2. CRA-issued registration confirmation letter*
  3. CRA-issued exemption certificate
    *not applicable to greenhouse operators

Enbridge Gas must be in possession of the above three documents to reflect the applicable exemption. Only after Enbridge Gas has received these documents can the applicable exemption from the federal carbon charge be applied within our billing systems.

Energy Efficiency Options

Learn how to lower your carbon footprint, reduce your energy use and save money using our energy efficiency tips and solutions . Talk to your Enbridge Gas energy conservation advisor for more rel="noopener noreferrer" information.

More Information

Keep yourself informed and up to date on information pertaining to your business with regards to the federal carbon pollution pricing program. Learn more about the federal carbon pollution pricing program from the Government of Canada.

*The Federal Carbon Charge and 2019 balances in the customer variance accounts for on-reserve First Nations customers are interim, per the OEB’s decision and order in EB-2019-0247.