The federal fuel charge also known as the Carbon Tax came into effect as of July 1, 2023, in Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.
The Government of Canada has mandated provinces to update carbon tax rates and remove exemptions to align with federally proposed changes for 2023 to 2030.
Residents of these provinces will receive three quarterly payments (July 2023, October 2023, and January 2024) in the first year and four payments in the year(s) after that.
The Government of Newfoundland and Labrador disagrees with the federal approach, which includes, among others, the removal of carbon tax exemptions on home heating fuel, municipal operations, and intra-provincial aviation.
As a result, the Government of Canada is imposing its federal Fuel Charge (the backstop) on Newfoundland and Labrador; and the province is repealing its legislation and will no longer collect carbon tax as of July 1, 2023.
Wholesalers and retailers of carbon products should cease to charge the provincially administered carbon tax.
Retailers should also record their inventory of carbon products and may apply for a refund of carbon tax paid on those inventories through the following application – Carbon Retailer Refund Application (July 1, 2023)
Effective July 1, 2023, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador will become listed provinces under the federal Greenhouse Gas Pollution Pricing Act. This means that fuel used in these jurisdictions will be subject to the fuel charge under the Act.
For information pertaining to the Government of Canada’s new Fuel Charge, please visit their website at Federal Fuel Charge or call 1-866-330-3304.