Federal Carbon Pricing Program

In accordance with the Greenhouse Gas Pollution Pricing Act (GGPPA), the federal government implemented a carbon pricing program in Ontario effective Jan. 1, 2019. This Federal Carbon Pricing Program (FCPP) is comprised of two components:

  1. Beginning Jan. 1, 2019: An output-based pricing system (OBPS) for industrial facilities producing greenhouse gas (GHG) emissions above a certain threshold; and
  2. Beginning Apr. 1, 2019: 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), beginning at $20/tCO2e (3.91 cents/m3 for marketable natural gas) on Apr. 1, 2019 and increasing annually each April by $10 to $50/tCO2e (9.79 cents/m3 for marketable natural gas) in 2022.

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 effective Aug. 1, 2019, with the exception of customer facilities that have an exemption certificate issued by the federal government. The federal carbon charge will show 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 federal carbon charge went into effect in Ontario on April 1, 2019 and Enbridge Gas has been incurring these costs on customers’ behalf since that time. On July 4, 2019 we received approval from the Ontario Energy Board (OEB) to include the federal carbon charge on our bill effective Aug. 1, 2019. We have tracked these incurred costs in approved deferral and variance accounts and will seek to recover them from customers at a later date, subject to OEB approval.

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

On July 9 2019, the federal government released final regulations amending the Fuel Charge Regulations under the GGPPA. Partial relief of the federal carbon charge has been confirmed to apply to natural gas that is exclusively used in the operation of certain commercial greenhouses. In other words, greenhouse operators may be provided relief upfront through the use of an exemption certificate, such that only 20 per cent of the federal carbon charge will apply to natural gas delivered by a registered distributor to an eligible greenhouse operator.

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

  1. Confirm your exemption eligibility:
    1. Review the definitions released in the draft regulations pertaining to greenhouse operations to ensure your business meets the definition of greenhouse operator and eligible greenhouse.

      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.

    2. 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 Act) or propane.

  2. Complete Form L404 and Enbridge Gas’ Facility Declaration Formand submit to contractsupportandcompliance@enbridge.com. 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 draft regulation, which states that if a qualifying greenhouse fuel that is delivered by a registered distributor (e.g., Enbridge Gas) 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.
Output-Based Pricing System (OBPS)

On Jan. 1, 2019, the OBPS component of the FCPP came into effect in Ontario as a way 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).

A 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 emissions) 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, refer to the Registration Notice provided by the federal government.

OBPS Registration

Before registering, review the published GGPPA materials 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.
  2. Register with the Canada Revenue Agency (CRA) to receive an 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, and on the application of the Registration Notice and the Information Order, please email ec.stfr-obps.ec@canada.ca or call 1-833-849-9160.

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

CRA Registration Information: 1-866-959-7797

OBPS GHG Reporting Requirements

Businesses registered under OBPS will be 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 notify Enbridge Gas by providing confirmation of your facility’s registration with the CRA. 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.

Enbridge Gas strongly advises customers eligible for exemption under the GGPPA to continue with the registration steps and to submit the following materials to contractsupportandcompliance@enbridge.com as early as possible.

  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.

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 pricing program from the Government of Canada.

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