Federal Government

Canada was one of the first countries to sign the Kyoto Protocol in 1998, however current greenhouse gas emissions are 25% higher than they were in 1990. Canada’s commitment to Kyoto was to reduce GHG emissions by 6% in the period 2008 to 2012, however emissions are more than 32% above the Kyoto target. Without specific actions, Canada’s GHG emissions are projected to grow a further 24% by 2020, reaching about 940 megatonnes.

The current government has recently released its action plan to fight climate change. The federal government has established a national target of an absolute 20% reduction in greenhouse gases by 2020 from 2006 levels – a reduction of approximately 330 megatonnes from projected levels.

Forcing industry to reduce its greenhouse gas emissions
Setting up a carbon emissions trading market, including a carbon offset system
Establishing a market price for carbon.

Greenhouse gas emissions from the industrial sector will be reduced by 165 megatonnes from projected levels by 2020. The Regulatory Framework for Industrial Greenhouse Gas Emissions was released in March of 2008. Existing facilities in all industrial sectors will face requirements to improve their emissions performance every year. Plants that began operation in 2004 or later will face even tougher requirements to force them to use cleaner fuels and green technology. The regulations will apply to 16 sectors including oil sands, oil and gas, power plants, refineries, chemical and fertilizer plants, pipelines, cement, metals, smelters, and pulp and paper. Mandatory reductions begin in 2010 and become tougher every year.

All oil sands plants will have to meet the tougher emissions standards. New oil sands plants and coal-fired power plants coming into operation in 2012 or later will face the toughest requirements of all. Coal-fired plants will have to meet a tough new emissions standard and starting in 2012 the regulations will effectively end the construction of new coal-fired plants. The industrial regulations will achieve half of the reductions required to meet the national target of a 20% reduction by 2020 and will impact how Canada produces and uses energy while imposing a price on carbon that will rise over time as regulations toughen.

Mandatory renewable fuel content in gasoline, diesel and heating oil
Tougher fuel consumption standards for cars, light trucks and sport utility vehicles
Energy efficiency requirements for a wide range of commercial and consumer products
Performance standards that will ban incandescent light bulbs.

The current ecoACTION programs will continue and be expanded to stimulate the growth of renewable energy and fuels, energy efficient homes and buildings, fuel-efficient cars and trucks and increased public transit infrastructure. The federal initiatives in these areas are expected to achieve GHG emissions reductions of 65 megatonnes from projected levels by 2020.

In addition, the government wants to achieve additional emissions reductions (25 megatonnes) from the electricity sector – the largest single source of greenhouse gases in Canada. A task force has been set up to work with the provinces and electrical generating industry to meet this goal.

The provinces have numerous initiatives in place to reduce GHG emissions and it is anticipated that these will provide an incremental 40 megatonnes in emissions reductions by 2020. The federal government has provided $1.5 billion in new funding to the provinces and territories to support their climate change initiatives and it is anticipated that the provinces will introduce new measures that will reduce GHG emission by another 35 megatonnes by 2020.

The proposed offset system will issue credits for real verified domestic reductions or removals of GHG in activities outside the regulations. Propane is well positioned as a low carbon fuel to take advantage of the offset credits by generating GHG emissions reductions in the transportation as well as other sectors.

There are numerous federal government program in place encourage consumers and business to be more energy efficient in buildings and transportation. The ecoENERGY Retrofit for homes is available to owners of single-family homes for a Federal grant of up to $5,000 for improving the energy efficiency of their home.

The ecoAUTO Rebate program encourages Canadians to buy more fuel-efficient vehicles by offering rebates of $1,000 and $2,000 for vehicles that meet the criteria – primarily subcompact cars and hybrids. A small number of E85 flex fuel vehicles are also eligible. Fuel inefficient vehicles such as large SUV’s and performance cars are subject to a Green Levy in excise tax ranging from $1,000 to $4,000.

The ecoEnergy Retrofit – Small and Medium Organizations Program provides financial incentives of up to 25% of project costs to a maximum of $50,000 to help businesses implement energy saving projects.

Alternative fuels (propane, natural gas, methanol, ethanol, hydrogen, electricity) enjoy Federal excise tax relief compared to gasoline and diesel. Excise tax is charged as a flat rate of 10.0 cents per litre for gasoline (in effect since 1995) and 4.0 cents per litre for diesel fuel (in effect since 1987). Alternative fuels are exempt from the Federal excise tax. In the case of blended fuels where products such as ethanol and biodiesel are mixed with gasoline or diesel, the non-petroleum portions are tax-exempt. GST and HST taxes collected by the Federal Government are imposed on all fuels.