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Article

The Pushback Against Canada’s Carbon Pricing System: A Case Study of Two Canadian Provinces, Saskatchewan and Nova Scotia

by
Larry Hughes
1,* and
Sarah Landry
2
1
Department of Electrical and Computer Engineering, Dalhousie University, Halifax, NS B3H 4R2, Canada
2
School for Resource and Environmental Studies, Dalhousie University, Halifax, NS B3H 4R2, Canada
*
Author to whom correspondence should be addressed.
Energies 2024, 17(22), 5802; https://doi.org/10.3390/en17225802
Submission received: 16 September 2024 / Revised: 7 November 2024 / Accepted: 14 November 2024 / Published: 20 November 2024
(This article belongs to the Special Issue Energy Transition and Environmental Sustainability: 3rd Edition)
Browse Figures
Figure 1
<p>Changes in the price of a litre of gasoline under the federal backstop and Nova Scotia’s system.</p> "> Figure 2
<p>Effect of 2023–2024 CAIP rebates for oil-heated households in Nova Scotia.</p> "> Figure 3
<p>Effect of 2023–2024 CAIP rebates on electrically heated households in Nova Scotia.</p> "> Figure 4
<p>Effect of 2023–2024 CAIP rebates on natural-gas-heated households in Saskatchewan.</p> "> Figure 5
<p>Effect of removing the carbon tax on oil-heated households in Nova Scotia in 2023–2024.</p> "> Figure 6
<p>Effect of 2024–2025 CCR on oil-heated households in Nova Scotia.</p> "> Figure 7
<p>Effect of 2024–2025 CCR on natural-gas-heated households in Saskatchewan.</p> "> Figure 8
<p>Percent breakdown of household heating systems by province (horizontal axis denotes province and its number of heating systems × 1000; electric + refers to dual systems of electricity plus natural gas or heating oil; wood + refers to dual systems of wood plus electricity or heating oil).</p> "> Figure 9
<p>A comparison of the carbon tax on natural gas and heating oil for space heating at <span>$</span>65/tonne of CO<sub>2</sub>e.</p> "> Figure A1
<p>Map of Canada showing the ten provinces (BC: British Columbia; AB: Alberta; SK: Saskatchewan; MB: Manitoba; ON: Ontario; QC: Quebec; NB: New Brunswick; NL: Newfoundland and Labrador; PE: Prince Edward Island; and NS: Nova Scotia) and three territories (YK: Yukon; NT: Northwest Territories; and NU: Nunavut).</p> ">
Versions Notes

Abstract

:
As part of its plan to transition to an energy secure and environmentally sustainable future, Canada has had a national carbon pricing system since 2019. When first introduced, the $20 (‘$’ refer to Canadian dollars (CAD) in this paper) per tonne price was widely accepted by most Canadians and seen as a way of helping Canada meet its emissions reduction pledges made at the 2015 United Nations Climate Change Conference (COP 21) in Paris. The Canadian system is novel in that it both charges consumers for their emissions and reimburses them for their expected emissions; this is intended to raise awareness of their emissions and encourage those who can afford to opt for lower-emissions energy services to do so. By 2023, the combination of the carbon price reaching $65 per tonne and the post-pandemic economic slowdown was seized on by numerous politicians as a way of pushing back against the carbon pricing system, with most demanding the entire system be scrapped. The debate intensified in late 2023 and into 2024, when the federal government removed the carbon tax on home heating oil because the reimbursement was insufficient to cover the cost of the tax. In this paper, we consider the recent actions of two Canadian provinces, Saskatchewan and Nova Scotia, embroiled in the federal carbon pricing system debate due to the removal of the carbon tax on fuel oil for space heating. The objective of this paper is to identify how some of the reasons, including global post-pandemic inflation and other challenges facing Canadians, such as those cited in third-party polls, have contributed to a rise in the system’s unpopularity. Our method estimates and compares the impacts of the carbon tax on the household energy services for space and water heating, lighting and appliances, and private (i.e., household) transportation for different types of housing (apartment, single-attached, and single-detached) and number of occupants (two, three, and four) in Saskatchewan and Nova Scotia. The results of this work show that while Saskatchewan households have higher energy intensities than those in Nova Scotia, the impact of the carbon tax on Nova Scotians using fuel oil for heating was greater than in Saskatchewan. In Saskatchewan and Nova Scotia, natural gas and electricity, respectively, are used for heating. This paper concludes with a summary of our findings and potential options for improving perceptions of the system.

1. Introduction

At the 2015 United Nations Climate Change Conference (COP 21), 192 countries, including Canada, signed the Paris Agreement pledging to limit global temperature rises to 2 °C and to pursue efforts to limit the rise to 1.5 °C [1,2]. The Agreement aims to strengthen the signatory countries’ abilities to respond to climate change impacts. The major features of the Agreement include the long-term temperature limit goal, environmentally sustainable energy practices, climate neutrality, mitigation, the development of carbon sinks and reservoirs, climate adaption, and market and non-market measures [2,3].
Canada has adopted many of these features in its climate action plans to transition to an environmentally sustainable energy future [4,5]. One significant market measure to which all Canadians are subject is a carbon pricing system [6].
Carbon pricing puts a price on greenhouse gas emissions as a way of encouraging greenhouse gas emitters to reduce their emissions or continue paying for the emissions. According to the World Bank, there are a total of 89 carbon pricing initiatives worldwide, with 50 national and 39 subnational jurisdictions that have or are implementing a price on carbon as of 2024 [7]. These governments have implemented carbon pricing in a variety of ways.
European Union (EU) countries must implement the EU’s Emissions Trading System (ETS). The EU ETS is a cap-and-trade scheme, like that of California. The ETS was introduced in 2005 as an EU Directive, a piece of legislation that sets out objectives that EU member states must attain. In addition, the EU released the “Fit for 55%” package, which proposes to revise and update the EU’s climate laws to reduce EU greenhouse gas emissions by 55% by 2030 as part of the European Green Deal. EU member states are bound to meet emission reduction targets [8]. However, each member state has choices in how they reach those goals, with many introducing carbon taxation [9].
Several EU countries have introduced a carbon tax on top of the EU ETS. For example, prior to introducing carbon pricing, the government of Sweden had been collecting taxes on energy sources since the 1920s. Sweden’s carbon tax was introduced in 1991, administered by the Department of Finance, and in 2019, was the highest global carbon taxation [10,11]. Sweden applies the tax to all fossil fuels, proportionate to their carbon content, except for biofuels. In 2023, the carbon tax rate was expected to be EUR 122 per tonne of CO2, or approximately $175 (Canadian dollars) per tonne, after having been introduced at EUR 25 per tonne of CO2, or approximately $36 per tonne.
France introduced its carbon system in 2014, applying an excise duty on energy consumption that follows the EU’s carbon price; in 2021, the peak carbon tax in the EU was EUR 60 per tonne of CO2. France’s 2021 carbon tax was EUR 44 per tonne of CO2, or approximately $65 per tonne [12]. This tax is applied to the transportation and building sectors in the country but does have exemptions for domestic air transport, road transport, and agriculture. These exemptions are entitled to partial reimbursement [12].
Argentina has taxed carbon since 2018 and applies the tax to liquid and solid fuels but not to gaseous fuels, such as natural gas. This carbon tax is tied to the Consumer Price Index and started at USD 10 per tonne of CO2, covering approximately 16% of all greenhouse gas emissions in the country [13,14].
Japan’s carbon tax, the “Tax for Climate Change Mitigation”, was introduced in 2012. The tax sets a rate per quantity for fossil fuel use, such as oil, coal, or natural gas. This rate is raised every three and a half years [15]. The tax operates on the “wide and thin” concept, where the burden is spread thinly amongst many.
Cost-of-living increases and post-COVID-19 pandemic inflation are also impacting households across the world [16]. These challenges impact households differently, and taxes are often one of the largest expenses in a household budget [17]. As a result, carbon taxes are often unpopular, as they can be seen as unfair and an increase in household expenses [18].

Objective and Contents

The objective of this paper is to identify some of the reasons, including global post-pandemic inflation and other challenges facing Canadians, such as those cited in third-party polls, that have contributed to a rise in the system’s unpopularity.
To meet this objective, we examine Canada’s carbon pricing system through the lens of two Canadian provinces currently subject to all or parts of the federal carbon pricing system: Saskatchewan and Nova Scotia. This study explores how this system impacts various households in each province and reasons for pushback, such those identified in third-party polls. We selected these provinces because of their provincial governments’ vocal opposition to Canada’s carbon pricing system and ways in which it is attempting to transition to an environmentally sustainable energy future. Saskatchewan refused to agree to the original pan-Canadian framework and has maintained ongoing opposition to it, while Nova Scotia had its own carbon pricing system until 2023, when the federal government reviewed the Nova Scotian system and found it did not meet federal requirements.
First, we give an overview of Canada’s carbon pricing system. This is followed by an examination of a major change to the carbon pricing system that occurred in late 2023 and the response from various levels of government, notably in Saskatchewan and Nova Scotia. This is followed by a discussion of the growing pushback against the carbon pricing system, the lessons learned, and what could be implemented to increase the acceptance of the program through targeted carbon pricing and rebates. The paper ends with a summary of this research and of Canada’s use of carbon pricing in its attempt to transition to an energy secure and environmentally sustainable future.
We believe this is the first paper to have conducted a detailed comparison of the impacts of the application of Canada’s carbon pricing system on households in different provinces and territories.

2. Carbon Pricing in Canada

In December 2016, the federal, provincial, and territorial governments (see Appendix A) agreed to the Pan-Canadian Framework for Clean Growth and Climate Change [6]. Saskatchewan was the only jurisdiction that did not join the Framework [19]. The Framework requires each province and territory to develop and implement a carbon pricing system to help Canada reduce its greenhouse gas emissions.
Although Canada’s carbon pricing system was originally announced in 2016, it was not implemented nationwide until 2019 to give the provinces and territories time to develop their own programs. Provinces and territories had a choice of systems: an explicit price-based system (as in British Columbia, which had been in place since 2008 and by 2019, had a $30 per tonne price [20]), a cap-and-trade system (as in Quebec) [21], or a hybrid of the two [22]. Environment and Climate Change Canada (ECCC), the federal body that develops and implements environmental policies and programs, would then assess each province and territory’s proposed system to determine if it met the minimum national stringency standard, known as the “federal benchmark” or “backstop” [23]. The province or territory might also choose to use the federal pricing system [24].
The backstop consists of two parts: an Output-Based Pricing System (OBPS) for industrial emitters and a fuel charge for non-industrial emitters.
The carbon price was originally set at $20 per tonne of “carbon” (that is, CO2 equivalent, or CO2e) for fiscal year 2019–2020. The price increased by $10 per tonne on the first of April each year until 2022–2023, when it reached $50 per tonne. On 1 April 2023, the price increased by $15 (to $65 per tonne) for 2023–2024. The price is intended to increase by $15 per tonne each year until 1 April 2030, when it will be $170 per tonne.

2.1. Industrial Emitters

Industries with emissions exceeding 50,000 tonnes of CO2e per year are subject to the OBPS; industries emitting between 10,000 tonnes and 50,000 tonnes of CO2e per year can join voluntarily. Each industry (“facility”) has a sector-specific output-based standard based on the emissions intensity of its activity (i.e., tonnes of CO2e per unit of measurement). Facilities in these sectors then compare their emissions with the equivalent OBPS emissions limit for their sector [25].
If emissions are below the facility’s limit, the facility earns emissions credits, which then can be sold or saved for future use. However, if emissions exceed the limit, the carbon price is then applied to the emissions above the limit. The owner of the facility has a choice of either paying an excess emissions charge to the federal government, purchasing emissions credits, or remitting its credits to the federal government [26]. The OBPS is determined annually. If it exceeds the OBPS price on carbon, the owner of the facility can collect the difference from its customers; otherwise, it is refunded.
One of the objectives of the OBPS is to encourage industrial emitters to reduce their emissions by setting a sector’s emissions intensity standard to a fraction of the sector’s average emissions intensity. In doing this, ECCC, the federal department responsible for setting the standard, must consider the impact on an industry’s competitiveness, especially if a facility has international competitors [25].

2.2. Non-Industrial Emitters

The second component of the federal backstop is the “fuel charge”, a regulatory charge on the use of fossil fuels, principally those used for transportation, electricity, and home space and water heating. It is intended for non-industrial emitters, typically residential households and small and medium enterprises.
Non-industrial emitters are those with emissions less than 50,000 tonnes CO2e per year. These emitters are subject to a carbon price on the carbon content of all liquid fuels (such as gasoline, diesel, and heating oil), natural gas, and electricity produced from emissions-intensive energy sources such as coal, petroleum coke, and natural gas [27,28]. The carbon levy for each emissions-intensive energy source is determined by the annual price per tonne on CO2e and the energy source’s emissions intensity, such as for example, kilograms (kg) of CO2e per litre of a liquid fuel.
Examples of the annual carbon levy on commonly used energy sources and their prices for 2023–2024 until 2030 are presented in Table 1. Electricity systems vary widely between provinces and territories, and electricity generators are subject to the OBPS; therefore, electricity is not included in the table.

2.3. Application of the Federal Backstop

When the federal carbon pricing system was introduced in 2019, British Columbia and Quebec were exempt: British Columbia already had a carbon pricing system since 2008, targeting the emissions from industry and end users [30], and Quebec has been part of California’s cap-and-trade program since 2014 [31]. Quebec does not participate in Canada’s carbon pricing system.
The carbon pricing systems in three provinces—Newfoundland and Labrador, Prince Edward Island, and Nova Scotia—were initially accepted by the federal government in 2018. The remaining four provinces—Alberta, Saskatchewan, Manitoba, and Ontario—were subject to the federal system. The provinces mounted several court challenges claiming the carbon pricing system was unconstitutional and infringed on provincial rights. The provinces (except for Manitoba) eventually took their challenge to the Supreme Court of Canada, which rejected the provincial claims, led by Saskatchewan, stating that emissions are a national concern [32].
Consequently, the federal backstop was applied only to Alberta, Manitoba, Nunavut, Ontario, Saskatchewan, and Yukon, with varying system configurations. For example, Alberta, Ontario, and Saskatchewan were subject to the federal pricing system for the federal fuel charge and the provincial carbon pricing system for industry, while Manitoba, Nunavut, and Yukon were subject to the federal backstop for both the public and industry [33].
The carbon pricing system in Canada’s remaining provinces and territories are as follows:
  • New Brunswick’s carbon pricing system has evolved since 2018. It is no longer part of the federal backstop, although non-industrial emitters pay the federal carbon price, and industrial emitters are subject to the provincial OBPS [34].
  • Between 2019 and 2023, Newfoundland and Labrador, Prince Edward Island, and Nova Scotia had their own carbon pricing systems [35]. In 2022, their programs were rejected by the federal government because they did not meet the stringency standard [36]; starting in 2023, these provinces were incorporated into the federal carbon pricing system [33].
  • The Northwest Territories and Yukon have programs similar in structure to the federal backstop [37,38]. Given its location in the high Arctic, Nunavut has a limited carbon tax [39].

2.4. The Carbon-Levy Rebate

Since its inception, Canada’s carbon pricing system has been “about recognizing the cost of [carbon] pollution and accounting for those costs in our daily decisions” [24].
In keeping with this maxim, the carbon pricing system for non-industrial emitters has both the carbon levy applied to energy sources and a rebate intended to offset the cost of the levy. In doing so, the system was intended to reduce the cost of the levy for low- and middle-income Canadians to the point where they would be receiving at least as much as they paid [40]. This was to raise their awareness of the levy. On the other hand, higher-income Canadians who, it was assumed, spent more on energy products would pay more for their emissions and take this into account by changing the way they consumed emissions-intensive energy sources. This part of the federal carbon pricing system was based on work done by the Ecofiscal Commission [41].
Although the carbon price is a levy as opposed to a tax (that is, the carbon price per unit of energy remains constant, regardless of the cost of the fuel), it is now widely referred to as the “carbon tax”.
The Climate Action Incentive Payment (or CAIP, the name given to the rebate) varies by year, province, and territory and whether the person or household lives in an urban or rural location. In 2023, the CAIP underwent three changes. First, the carbon price increased from $50 to $65 per tonne emitted. Second, rebates, originally issued once a year in early summer, were instead issued quarterly (April, July, October, and January). Third, four additional provinces were subject to the federal backstop—New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. In total, ten provinces and territories are now subject to the federal fuel charge, while the remaining three—British Columbia, the Northwest Territories, and Quebec—have independent pricing systems [24].
The urban and rural per-person and four-person household CAIP for 2023–2024 for the eight provinces subject to the federal carbon pricing system is shown in Table 2. The CAIP for the four original provinces (Alberta (AB); Saskatchewan (SK); Manitoba (MB); and Ontario (ON)) was paid in four installments in April, July, October, and January. The CAIP for the four new provinces (New Brunswick (NB); Nova Scotia (NS); Prince Edward Island (PEI); and Newfoundland and Labrador (NL)) was paid in three installments in July, October, and January. Individuals and households in rural areas received a 10% supplement, but given the rural nature of Prince Edward Island, the urban and rural payments were identical.
The rebate underwent several changes for the fiscal year 2024–2025. First, the name of the rebate was changed from Climate Action Incentive Payment to Canada Carbon Rebate (CCR). Second, the carbon tax increased to $80 per tonne. Third, the rebate (the new CCR) was changed, increasing in some provinces and decreasing in others. Finally, the supplement for rural households increased from 10% to 20% [43]. The CCR per person and family amounts for 2024–2025 are given in Table 3.
Despite the apparent fairness in its design and acceptance in its early years, resentment against the carbon pricing system grew as the carbon price increased and politicians saw an opportunity to gain support by objecting to it.

3. Methods

The Climate Action Incentive Payment (CAIP) and Canada Climate Rebate (CCR) to individuals and families are intended to equal or exceed the carbon tax paid by the household on emissions associated with the energy services they use. These services are space and water heating, lighting and appliances, and private (i.e., household) transportation. Our methods separate emissions from household services and those from transportation; the total carbon tax paid is the sum of the carbon tax paid on household services and transportation.
The methods explained here are determined by the availability of data.

3.1. Emissions from Household Services

The household activities carbon tax is the sum of the carbon taxes on space heating, water heating, lighting, and appliances (the energy services).

3.1.1. Data Availability

Household energy service data are available for apartments, single-attached homes, and single-detached homes. The data for each household type consist of the total number of households in the jurisdiction (thousands); the total energy used by all these households for the four energy services (petajoules or PJ); and the efficiency of the space and water heating systems.
From this, we derive the average volume of energy (gigajoules or GJ) required by each energy service for a single household:
A v e r a g e   v o l u m e   o f   e n d   u s e   e n e r g y   ( G J ) = T o t a l   e n e r g y   f o r   s e r v i c e   ( P J ) T o t a l   n u m b e r   o f   h o u s e s
Since the energy required is the end-use energy, it is necessary to account for the efficiency of the energy conversion system (such as a natural gas boiler or a heat pump):
T o t a l   e n e r g y   r e q u i r e d   ( G J ) = A v e r a g e   v o l u m e   o f   e n d   u s e   e n e r g y   ( G J ) C o n v e r s i o n   e f f i c i e n c y

3.1.2. Space and Water Heating

Determining the carbon tax on space and water heating used by an average household is dependent on the energy source (usually natural gas, electricity, or fuel oil), the conversion efficiencies of the household heating and water heating systems, and the total energy required (see above). The total energy required (GJ) is converted to the units used by the energy source (i.e., m3, natural gas; kilowatt-hours, electricity; and litres, fuel oil). With this, the carbon tax is obtained using the carbon price on the energy source (see Table 1):
C a r b o n   t a x   ( $ ) = T o t a l   e n e r g y   r e q u i r e d   ( G J ) × U n i t s   o f   e n e r g y G J × C a r b o n   p r i c e   ( $ ) U n i t   o f   e n e r g y
The same steps are used for both space and water heating.

3.1.3. Lighting and Appliances

The energy used for both lighting and appliances is electricity. We assume the service’s efficiency has already been accounted for in the available data. The per-household energy consumption for each service is the total energy required.
The household emissions for these services are determined from the volume of electricity used (kWh) and the electricity supplier’s carbon price ($/kWh). Although these emissions are indirect, the end user is considered responsible for them:
C a r b o n   t a x   ( $ ) = T o t a l   e n e r g y   r e q u i r e d   G J × 277.8   k W h G J × C a r b o n   p r i c e   ( $ ) k W h
The same steps are used for both lighting and appliances.

3.2. Emissions from Transportation

Determining the annual emissions from an individual vehicle requires the distance driven in a year (km), the fuel consumption (L/100 km), and the emissions intensity of the fuel (g/L) or the emissions cost per litre ($/L; see Table 1):
C a r b o n   T a x / V e h i c l e   ( $ ) = D i s t a n c e   ( k m ) × F u e l   C o n s u m p t i o n   ( L ) 100   k m × C a r b o n   p r i c e   ( $ ) L
An estimate of the carbon tax on private transportation per person is obtained from the vehicle stock and the jurisdiction’s population:
C a r b o n   T a x / P e r s o n   ( $ ) = C a r b o n   T a x / V e h i c l e   ( $ ) × V e h i c l e   s t o c k T o t a l   P o p u l a t i o n
In jurisdictions where there is a significant number of both light duty passenger vehicles (LDPVs or cars) and light duty passenger trucks (LDPTs or light trucks), we estimated the per-person carbon tax for both LDPVs and LDPTs. The sum of these two values is the per-person carbon tax for transportation.
Unlike household activity emissions, which are estimated based on the size of the household’s footprint, transportation emissions are estimated based on the number of occupants in the household:
C a r b o n   t a x / H o u s e h o l d   ( $ ) = O c c u p a n t s × ( C a r b o n   t a x   o n   L D P V s + L D P T s )

4. Case Study

We now examine the response to carbon pricing in two Canadian provinces—Saskatchewan and Nova Scotia—where there has been considerable political pushback to the system. The two provinces are in different regions of the country: Saskatchewan is a landlocked prairie province in western Canada, and Nova Scotia is an east coast province protruding into the Atlantic Ocean [45,46]. Some provincial statistics are shown in Table 4.

4.1. Data

4.1.1. The Price on Carbon

Except for electricity, the price on all emission-intensive sources is the same in Saskatchewan and Nova Scotia. Electricity is different for geological and historical reasons. Both provinces have historically been heavily reliant on coal in their mix, although this is changing with electricity providers required to phase out coal use by 2030 [51]. The respective 2023–2024 energy mixes of the two principal electricity providers in the two provinces—SaskPower and Nova Scotia Power—are summarized in Table 5.
To protect consumers from extremely high per-kilowatt-hour carbon prices, electricity providers determine the cost using the OBPS, which reduces the impact on its customers. The annual OBPS values of SaskPower and Nova Scotia Power are opaque; however, we estimate from the annual corporate reports that the cost to the ratepayers in Saskatchewan was approximately $0.0078 per kWh in 2022–2023, and in Nova Scotia, the cost to ratepayers was approximately $0.0041 per kWh in 2023.

4.1.2. The 2023–2024 and 2024–2025 Rebates

In addition to the carbon tax, the federal pricing system also has a quarterly rebate. The rebate is paid to individuals and households who have paid their income taxes. For the purposes of this paper, we examine the three different household sizes: two, three, and four occupants. This will result in different levels of household rebate and energy use.
The 2023–2024 CAIP for various household sizes in Saskatchewan and Nova Scotia are given in Table 6. As the carbon pricing system began on 1 July 2023 for Nova Scotians, the payments were for three (fiscal) quarters only, whereas Saskatchewan’s started on 1 April 2023 and had payments spread over four quarters. In 2023–2024, the rebate for rural individuals and households in all provinces was 10% greater than the rebate given to their urban counterparts.
The price on carbon increased at the end of fiscal year 2023–2024 from $65 to $80 per tonne. All provinces, including those that joined in July 2023, began receiving their 2024–2025 CCR on 1 April 2024. The annual CCR for 2024–2025 households are shown in Table 7.

4.1.3. Household Energy Consumption

The principal reason the provincial rebates are so different is the fact that Canada’s climate varies greatly across the country. This variation is apparent when considering residential energy consumption for space and domestic water heating, appliances, lighting, and transportation. To understand the effect of the carbon tax on different-sized households in the provinces, we have selected three different household types (apartment, single-attached, and single-detached).
The household energy requirements are shown in Table 8 and Table 9 for Saskatchewan and Nova Scotia, respectively, listing the type of household, the total number of households, the total energy consumed by all households by service (PJ), and the gigajoules (GJ) per household. The energy requirements for households in Nova Scotia are approximately 80% of that required for households in Saskatchewan.

4.1.4. Passenger Vehicles

Depending on the space heating system a household uses, transportation can be the largest or second largest source of emissions in most households. As gasoline, diesel, and other transportation fuels are all subject to the carbon tax, fuel consumption has been included in the carbon pricing estimates.
Data from the Office of Energy Efficiency and Statistics Canada on light duty passenger vehicles (LDPVs) and light duty passenger trucks (LDPTs) is limited to provincial averages for distances driven, fuel consumption, and vehicle stock. From this, the number of vehicles per person and the litres of gasoline consumed per person for Saskatchewan and Nova Scotia has been estimated by dividing the number of vehicles and the number of litres consumed by the total population. The results are shown in Table 10.
As the numbers or types of vehicles per household is not known, the litres consumed per person for both LDPV and LDPT is assumed to be applicable to each person in a household. For example, in a Saskatchewan household, each household would consume 979 L (the sum of LDPV and LDPT in row R7), whereas in a Nova Scotian household, each household would consume 917 L. The litres of gasoline per type of household is summarized in Table 11.

4.2. The 2023–2024 Carbon Price

On 1 April 2023, the carbon price increased by $15 from $50 per tonne to $65 per tonne in Saskatchewan. In Nova Scotia, the $65 price was delayed by three months (one quarter) and started on 1 July 2023.

4.2.1. Nova Scotia

Between 2019 and 2023, Nova Scotia had its own carbon pricing scheme, an in-province cap-and-trade program, which was accepted by the federal government [56]. The regulations required emitters of more than 50,000 tonnes of CO2e to participate in the program [57].
The program was structured to minimize the cost to Nova Scotians. We see this in Figure 1, which compares the price of a litre of gasoline under the federal backstop and Nova Scotia’s cap-and-trade program. The federal price per litre increased at a cost of $0.22 per litre on 1 April 2020, 2021, and 2022. The price in Nova Scotia hovered around $0.01 per litre for each of these years [58].
On 1 July 2023, Nova Scotia was required to join the federal carbon pricing system, leading to an increase in the carbon price on gasoline from about $0.01 per litre to $0.1431 per litre [59]. (Nova Scotia was given until 1 July 2023 to allow its cap-and-trade system to wind down [60].)
The impact of the federal system was not immediately apparent to Nova Scotia’s automobile drivers because the per litre carbon price, which quickly became known as the “carbon tax”, was listed in a variety of other federal fuel taxes and the 15% Harmonized Sales Tax or HST (a Value-Added Tax) [61,62]. The same held true for the carbon tax on electricity, which was grouped as part of the provincial electricity supplier’s new rate structure. However, the carbon tax was outlined on receipts for the 29% of households using heating oil for home heating or space heating.
The carbon tax on heating oil, $0.1738 per litre, was felt immediately by households filling their fuel tanks for the 2023–2024 heating season (October 2023 to March 2024). The carbon tax applied to heating oil between July 2023 and March 2024 on average households was $147 in apartments; $331 in single-attached households; and $419 in single-detached households.
Figure 2, Figure 3, Figure 4, Figure 5, Figure 6 and Figure 7 show the carbon tax paid for each energy service by the members of different sized households in either Saskatchewan or Nova Scotia. The stacked bars show the carbon taxes for space heating, light blue; water heating, orange; lighting, gray; appliances, gold; and transport, dark blue; and the tax collected (dark red). The rural and urban CAIP values are blue and green dashed horizontal lines.
In Figure 2, we see the expected effect of the CAIP rebates for the sample households in Nova Scotia using heating oil for both space and water heating for households in 2023–2024. In all cases, apartment dwellers paid the least tax and received a rebate ranging from $69 for a four-person urban household (receiving a rebate of $744 while paying a carbon tax of $675) to $165 (CAIP of $614 for a carbon tax of $449) for a two-person rural household.
However, in all other urban household situations, households paid more in carbon tax than they receive as a rebate. The lowest net loss is $54 for a two-person rural household living in a single-attached home paying a carbon tax of $688 with a CAIP of $558, and the largest net loss is $236 for a four-person urban household living in a single-detached home paying a carbon tax of $980 with a CAIP of $744.
Apart from two people living in either a single-detached or single-attached house and three people living in a single-detached house, the carbon tax on gasoline for vehicles exceeded all other carbon taxes.
The carbon tax on electrically heated homes in Nova Scotia in 2023–2024 was far less onerous because the carbon tax on electricity is calculated using the provincial electricity supplier’s OBPS. Consequently, electrically heated sample households paid far less carbon tax; the major impact of the carbon tax was the cost of personal transportation. As we see in Figure 3, the CAIP exceeded the carbon tax paid in all electrically heated households, leaving them with additional funds, ranging from a low of $180 for four people living in a single-attached (SA) household to $337 for a two-person household living in a rural apartment.

4.2.2. Saskatchewan

Although most households in Saskatchewan have a higher energy intensity compared with those in Nova Scotia, the lower emissions intensity of natural gas coupled with the higher CAIP meant that for all the sample households, the CAIP exceeded what a given household paid in carbon taxes. We see this in Figure 4, where all urban households had an excess CAIP, ranging from a low of $218 for two people living in a single-detached home paying $802 in taxes to a high of $623 for four people living in an apartment in a rural area and paying $873 in taxes. (Saskatchewan’s value added tax consists of a federal 5% goods and services tax, GST, and a 6% provincial sales tax, PST [61].)
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Figure 4. Effect of 2023–2024 CAIP rebates on natural-gas-heated households in Saskatchewan.
Figure 4. Effect of 2023–2024 CAIP rebates on natural-gas-heated households in Saskatchewan.
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4.2.3. Removing the Carbon Tax on Heating Oil

The complaints from households in provinces using heating oil grew more vocal as the 2023–2024 heating season approached [63]. On 26 October 2023, the prime minister announced the removal of the carbon tax on home heating oil for the next three years [64]. The prime minister also stated that the rural rebate would increase from 10% above the urban rate in 2023–2024 to 20% above the urban rebate in 2024–2025 for the next three years [65]. The decision to remove the home heating oil carbon tax may have been influenced by the fact that the provinces with the largest percentage of households heating with oil, Nova Scotia and Prince Edward Island [66], are also represented by many parliamentarians in the governing party [67].
Removing the carbon tax on heating oil had an immediate effect on households using heating oil. This is apparent in Figure 5, where the removal of the carbon tax on oil in the sample households meant that oil-heated households in Nova Scotia no longer experienced a net loss. The difference between the carbon taxes paid and the CAIP were closer to those found in electrically heated households, shown in Figure 3. The differences between the total tax paid and the CAIP after the removal of the carbon tax are apparent in Figure 5. In all households, the CAIP exceeded the total carbon tax paid: in urban households, the smallest difference was $276 for a four-person household living in a single-detached house paying $468 in taxes with a $744 CAIP and the largest was $321 for two people living in an apartment paying $237 in taxes with a $558 CAIP. In rural households, the difference ranged from $350 to $377 for a four-person single-detached household (receiving an $818 CAIP) to a two-person apartment (receiving a $614 CAIP), respectively.
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Figure 5. Effect of removing the carbon tax on oil-heated households in Nova Scotia in 2023–2024.
Figure 5. Effect of removing the carbon tax on oil-heated households in Nova Scotia in 2023–2024.
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4.3. The 2024–2025 Carbon Price

On 1 April 2024, the carbon price increased from $65 per tonne to $80 per tonne; the CAIP was renamed to the Canada Climate Rebate (CCR). The value of the rebate was increased, and the rural rebate was increased from 10% to 20%. The effects of the new price on carbon for 2024–2025 and the CCR are shown in Figure 6 for oil-heated households in Nova Scotia and Figure 7 for natural-gas-heated households in Saskatchewan.
In Nova Scotia, the removal of the carbon tax on heating oil meant that personal transportation was then responsible for most of the carbon tax paid in each household. Consequently, the excess CCR, or the difference between the CCR and the total taxes paid, was more dependent on the location of the household (urban or rural) and the amount of driving done by the household than other household energy use. This is apparent in Figure 6, where two-, three-, and four-person urban households had an average rebate of $270, $209, and $63, respectively, regardless of the type of household. The same holds true in rural households, where the average rebate for two-, three-, and four-person households, regardless of household type, was $394, $353, and $228, respectively.
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Figure 6. Effect of 2024–2025 CCR on oil-heated households in Nova Scotia.
Figure 6. Effect of 2024–2025 CCR on oil-heated households in Nova Scotia.
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In Saskatchewan, unlike Nova Scotia, the household space heating demand plays a significant role in determining the size of the difference between the carbon tax paid and the CCR. For example, the difference for a two-person single-detached urban household was $174 compared to $461 for an urban two-person household living in an apartment, and the difference for the rural counterpart was between $400 and $687 for the single-detached and apartment, respectively. The largest difference between the carbon tax and the CCR was $755 for a four-person household living in an apartment in a rural area.
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Figure 7. Effect of 2024–2025 CCR on natural-gas-heated households in Saskatchewan.
Figure 7. Effect of 2024–2025 CCR on natural-gas-heated households in Saskatchewan.
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5. Results

The removal of the carbon tax on fuel oil has been the only change to the carbon tax since its inception. When the removal of the carbon tax on fuel oil was announced, there was an immediate response from premiers in provinces where natural gas is used for space heating. The premiers called the removal of the carbon tax a “carveout” and demanded equal treatment for households in their provinces [68]. In the most extreme case, the premier of Saskatchewan refused to remit the carbon tax collected on electricity to the federal government [69,70].
The removal of the carbon tax on heating oil means that the difference between the CCR and the carbon taxes paid by Nova Scotians is now more in keeping with electrically heated households in the province. Despite this, the premier of the province continues to push back, demanding that Nova Scotia not be subject to the federal system so that it can return to its previous “made in Nova Scotia” program [71].

6. Discussion

At its most basic, Canada’s carbon pricing system is intended to educate Canadians on the cost of their use of emissions-intensive energy sources. Each emitting energy product a consumer purchases has a carbon content and a carbon cost, for which the consumer pays on purchase. Ideally, this nudge would encourage the consumer to purchase items that are less energy-intensive, use a less emissions-intensive energy source, or both. To reduce the impact of this cost, the customer (or someone in the customer’s household) receives a quarterly rebate. The rebate is paid at the start of every quarter, not the end.
For as straightforward as that appears, the assumptions on which it is built have made it prone to the problems we have seen in this paper. We now consider seven challenges which are contributing to the pushback against Canada’s carbon pricing system.

6.1. Provincial Space Heating Systems

Residential space heating systems are highly dependent on the convenience and availability of energy sources suitable for heating in each province.
In the provinces subject to the original federal backstop between 2019 and 2023, most households were heated by natural gas. By designing the CAIP to ensure it exceeded the carbon tax paid by most of these households and, by extension, households using less emissions-intensive energy systems such as electricity, the carbon tax was accepted by most households.
When the federal carbon pricing system was expanded in July 2023 to include Prince Edward Island and Nova Scotia, the predominant household heating system in these provinces was electricity (42.2% and 45.2%, respectively), resulting in them being allocated a lower CAIP because of the OBPS on electricity (see Figure 8). However, in both provinces, a sizeable percentage of households relied on heating oil for space heating (34.2% and 28.5%, respectively). Since the carbon price on electricity in these provinces was lower than the carbon price on heating oil, households relying on heating oil to heat their homes paid more carbon tax than for their electrically heated counterparts in an equivalent-sized house. The lower CAIP, in conjunction with the higher carbon tax, was cause for concern in homes heated by heating oil, as some households may have paid more carbon tax than they received via the CAIP.
This challenge did not exist when the carbon pricing system was initially established. The four original provinces (Ontario, Manitoba, Saskatchewan, and Alberta) relied predominantly on natural gas, from a low of 53.4% in Manitoba to a high of 83.5% in Alberta. The second most used energy source in these provinces is electricity, which has a lower carbon tax than natural gas because of the OBPS. In these provinces, electrically heated households paid less carbon tax for a house with the same energy intensity as one using natural gas, leaving a greater part of the rebate to be spent on other goods and services.

6.2. Comparing the Carbon Tax on Heating Oil and Natural Gas

Heating oil and natural gas are both carbon-intensive fuels, releasing heat and greenhouse gases when they are combusted. A litre of heating oil and a cubic metre of natural gas both contain about 0.037 gigajoules of energy [72]. However, there is a significant difference in their emissions intensities; a litre of heating oil, with an emissions intensity of 2.75 kg of CO2e per litre [73], emits between 40 and 43 per cent more greenhouse gases than a cubic metre of natural gas does with an emissions intensity of about 1.92 kg of CO2e [73]. Consequently, the carbon tax on natural gas is less than that of heating oil, as shown previously in Table 1.
The effect of this difference is illustrated in Figure 9, which shows the carbon tax of $65 per tonne on natural gas and heating oil in 2023–2024. Although it takes the same amount of energy to heat an area of, for example, 80 m2, the higher emissions intensity for heating oil means the household paid a carbon tax of $390 compared to the natural gas household, which paid $268. If an oil-heated household were to pay the same carbon tax as the natural gas-heated household, they would only be able to heat an area of 55 m2.
In 2023–2024, the carbon price was $65 per tonne and applied to all carbon-intensive fuel sources, including those used for space heating. A household using heating oil paid the same price on carbon as one using natural gas. This part of the carbon pricing system was equitable; however, the fraction of the CAIP used to cover the cost paid by the household was not. For example, a four-person household in Saskatchewan received a CAIP of $1360, and the carbon tax of $268 was approximately 20% of the household’s CAIP, which left about $1100 to cover the other services affected by the carbon tax. A four-person household in Nova Scotia received a CAIP of $744. The carbon tax on space heating of $390 was, therefore, 52% of the household’s cap, leaving approximately $350 to cover the carbon taxes on the other energy services used.

6.3. Public Resistance to the Carbon Pricing System

Carbon pricing is often met with resistance from members of the public and politicians, despite its support from environmental scientists, policymakers, and economists [74]. Often, a carbon pricing scheme can be perceived as “unfair”, deeming it as unacceptable and impacting the schemes’ strength in addressing climate change, with lower price levels than are effective.
Contributing factors to this unfairness may be location (e.g., rural versus urban), household income, household type (e.g., apartment versus large, single-family homes), or length of commutes. In addition, the public may simply be skeptical of its utility, effectiveness, and personal impacts [75,76]. For example, those in Germany who owned a car, heated their home using oil, or otherwise were high energy users were found to be more likely to oppose a carbon pricing scheme [77].
This resistance from the public has also been seen in Canada throughout the implementation of the federal carbon pricing system. In late 2023, the Angus Reid Institute released a poll that found that 42% of 2505 Canadians polled would choose to abolish the scheme altogether, with 25% opting to halt any further increases and 17% suggesting that the scheme be lowered temporarily [78]. Reasons cited include the cost of living, uncertainty about the scheme’s efficacy against climate change, and other perceptions of the rebate, including doubts that their household received the carbon rebate.
A poll from Abacus Data in early 2024 found that approximately half (51%) of 2199 Canadians polled were not aware that they were rebate recipients, with higher percentages in the Prairie and Atlantic provinces stating that they did not receive a cheque or a payment from the Government of Canada. Of the 49% who stated that they received a payment from the Government of Canada, 86% linked the payment to the CAIP [79].
The poll also found that there were misconceptions about eligibility, with 13% and 31% believing that they were not eligible or did not know if they were eligible to receive the payment, respectively. Respondents also misunderstood the purpose of the CAIP, did not perceive that a price on pollution would impact Canadian emissions, or linked pollution pricing to rising costs [79].
These concerns became more vocal after the publication of an economic analysis by the Parliamentary Budget Officer that estimated the carbon tax would result in a net loss for most Canadian households [80,81]. While this analysis has since been noted as having an error in its calculations by including the impact of industrial carbon pricing, the damage caused by the original publication was done [82].
Public opposition to Canada’s carbon pricing system is being used by provincial and federal politicians [83]. The leader of the opposition in the federal parliament has recognized the unpopularity of the carbon pricing system, adopting simple, but catchy, phrases like “axe the tax” and “spike the hike” as the party pushes back against the carbon tax [84,85,86,87].
Like Canada, other countries have also faced pushbacks on their carbon pricing initiatives. France found that there was opposition to its “fossil fuel tax,” implemented in 2014, with the “Yellow Vest” protests that took place in 2018 [88]. These protests eventually led to the cancellation of the tax, with analysts pointing to the impacts on rural French communities that do not have the same access to public transportation. In 2024, farmers and truckers protested the abolishment of tax exemptions for cars and tax breaks for agricultural diesel in Germany, leading to the rise of the Alternative for Germany [89]. In addition, Germany’s carbon tax was increased more than was planned, with this increase also a part of these protests. Similar problems were experienced in Australia with their short-lived carbon tax [90,91]. While much of this can be attributed to political orientation [92], individuals and households are worried more about the immediate future and the cost of living than climate change [93]. Much of this can be attributed to the difficulties many individuals and households across different countries are facing because of economic conditions. The carbon taxes in France, Germany, and Australia were narrowly focused, unlike in Canada, where carbon pricing is applied to all sectors of the economy. This broad application, as discussed throughout the paper, has impacted many across the spectrum, including households and industry, who are voicing opposition to the pricing system [94].

6.4. Promoting the Carbon Pricing System

Though the carbon pricing system is a key policy for the federal government, the messaging around it may have been confusing to the public. For example, most Canadians received the CAIP as a direct deposit to their bank account. In most banks, the deposit was simply marked as a payment from the federal government without indicating that it was for the CAIP. In households with two income tax filers, the CAIP was paid to the tax filer depending on alphabetic ordering of their names; for example, if the two members were named “Smith” and “Jones”, respectively, “Jones” would receive the household’s payment rather than “Smith”. This has changed with the CCR; the tax filer receiving the payment now receives an indication that they are receiving the payment, either electronically or by mail. Without this information, the customer may be unaware that they have received a rebate, contributing to the confusion over the carbon tax.
The carbon tax is applied to emissions-intensive energy sources, many of which are commonly used, notably transportation fuels such as gasoline and diesel, home heating fuels such as natural gas and heating oil, and electricity. Despite carbon pricing being described as recognizing the cost of pollution and accounting for the costs in daily decisions [24], the amount of the tax was not made apparent on invoices and receipts on a variety of different energy sources despite having been paid by the consumer [62]. Without this knowledge, the consumer is unaware of how much carbon tax is actually paid, again contributing to the confusion over the carbon tax.

6.5. The Rebound Effect

The rebound effect, or Jevons paradox, refers to an increase in energy consumption after energy efficiency improvements have been implemented [95]. The implementation of the CAIP means that all households receive a payment, regardless of their actual emissions. The difference was highlighted when we compared Nova Scotia’s 2023–2024 home heating systems before the removal of the carbon price on heating oil: electrically heated homes paid less carbon tax for heating and received a considerably larger excess rebate (CAIP or CCR) than those using heating oil. This difference increased further if the electrically heated household used electric vehicles.
If the excess rebate is used for purchasing goods made from emissions-intensive energy sources or services, such as a holiday trip requiring air travel, some of the emissions reduced due to the carbon tax will be offset by the consumer’s spending habits. This is a fairness issue, since low-income households without financial access to heat pumps or electric vehicles also pay the carbon tax but are unable to benefit in the same way as some higher-income households. This has contributed to the pushback against the carbon tax.
If the policy goal is to ensure fairness when administering the carbon tax, then the carbon pricing system should be aware of the carbon tax each consumer pays, as opposed to relying on a jurisdiction-wide estimate of the amount of carbon tax paid by a household.

6.6. The Decision to Remove the Carbon Tax on Heating Oil

When confronted with the potential of large numbers of households in Atlantic Canada being in financial difficulty because of the carbon tax on heating oil, the choices available to the federal government were limited:
  • Leaving the rebate (CAIP and CCR) unchanged. This would have left households in financially difficult straits.
  • Increasing the rebate. This would have been seen as fair to households using heating oil. It would also have meant that electrically heated households would have had a greater share of the rebate to spend on other goods and services. The same treatment would have been demanded by other provinces.
  • Remove the tax. This also would have been seen as fair to households using heating oil without increasing the payments to electrically heated homes. The same treatment would have been demanded by other provinces.
The third choice was the one made by the federal government, by removing heating oil from the carbon tax specifically, with the consequence that no one was happy [96]. However, by removing the carbon tax on heating oil for three years, the government gave households relying on heating oil three years to restructure their space and water heating systems to ones that were less emissions intensive. Indeed, the federal government has funded programs for households using heating oil to “get off oil” in favour of using heat pumps [97].

7. Conclusions

Despite carbon pricing’s merits as an emissions-reduction method, there have been varying approaches to implementation across the provinces and territories as well as public resistance. Canada’s climate, and therefore energy, heating, and transportation requirements across the country, varies greatly. Saskatchewan and Nova Scotia, which have similar populations, were compared to understand the impacts of the federal carbon pricing system. Both provinces are also subject to the federal pricing system, starting in Saskatchewan in 2019 and Nova Scotia in 2023.
Generally, residents in Saskatchewan use more energy for their household energy requirements (i.e., heating, hot water, appliances, and lighting) than those in Nova Scotia. Saskatchewan households also consume more transportation fuel, with Nova Scotian households consuming less energy for transportation than Saskatchewan. The differing energy mixes and the carbon tax, in conjunction with the rebate, therefore have different impacts on those living in Saskatchewan than they do on those living in Nova Scotia.
The application of the federal pricing system in Nova Scotia on 1 July 2023 had a noticeable impact on its residents, particularly for those using home heating oil. As Nova Scotia is one of the provinces with the largest percentage of households using heating oil, many residents were concerned about rising costs and that carbon taxes would be higher than CAIP rebates. This concern eventually led to what became known as the “carveout”, where home heating oil was removed from the carbon tax.
The removal of the carbon tax on home heating oil reduced overall carbon prices on affected households in Nova Scotia, bringing their total carbon tax closer to that of households using electric heat. The carveout was unpopular in provinces that rely more on natural gas for space heating, such as the case in Saskatchewan. However, all sample households in Saskatchewan received more through the CAIP than they paid in carbon tax, whether heated via oil or natural gas. This is primarily due to the lower emissions intensity of natural gas and higher CAIPs.
Canada’s carbon pricing system was initially popular as a method of addressing emissions reductions but is seen as a contributor to an increasing cost of living for many Canadians nationwide. This, and other concerns such as the impacts on low-income households, higher energy prices, and the system’s effectiveness, in addition to noted misconceptions about the federal pricing system, were noted in various polls, including by the Angus Reid Institute and Abacus Data. As prices increased, the carbon pricing system’s unpopularity has grown, and debates regarding it have risen, both politically and publicly. Vague messaging surrounding the system and inconsistency when breaking down costs, such as when paying for gasoline, as shown in Section 6.4, contributed to the public’s perceptions of the carbon tax. Political pushback has intensified the debate as well, with several news outlets, including CBC and CTV, covering “axe the tax” rallies held across the country since its implementation and the carbon price increase at the beginning of fiscal year 2024.
As part of its energy transition and sustainability commitments, Canada implemented carbon pricing to reduce its emissions. However, as discussed throughout this paper, unclear implementation, changes to its application, and public and political pushback has left the system on shaky ground.

7.1. Rebate Design Alternatives

The design of the rebates (both CAIP and CCR) assumed that all households of a given size in a jurisdiction would have the same energy demand, though this, as discussed, was not the case. This was not evident until the carbon pricing system was rolled out in provinces with a sizeable minority of heating systems using heating oil for space heating, as shown in Section 4.
A fairer system would have knowledge of a household’s actual emissions [98]. This could be done by the energy provider keeping a record of household energy purchases and making it available to the organization responsible for administering the carbon tax and its rebate.

7.2. Limitations

This paper has presented a snapshot of the impact of the federal carbon tax and rebate on three types of dwelling and three family sizes in households in Saskatchewan and Nova Scotia. The household energy use and transportation data are the averages of energy consumption over large geographic and climatic regions, which include both urban and rural households. Therefore, the analysis presented does not capture household-specific energy use and transportation data and is an average across the various households in Saskatchewan and Nova Scotia. An analysis of the actual impact on each household would require individual household income and expense data. The lack of specific household data is a limitation of the work presented; unaggregated data would permit a more accurate analysis.

Author Contributions

Conceptualization, L.H.; methodology, L.H. and S.L.; software, L.H.; validation, L.H. and S.L.; formal analysis, L.H.; resources, L.H.; data curation, L.H.; writing—original draft preparation, L.H. and S.L.; writing—review and editing, L.H. and S.L.; visualization, L.H.; supervision, L.H.; project administration, L.H. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Data Availability Statement

The original contributions presented in the study are included in the article, further inquiries can be directed to the corresponding author.

Acknowledgments

The authors would like to thank Sandy Cook for proofreading the final draft of the paper. We would also like to thank the two anonymous reviewers who took the time to review the paper and make several suggestions that have strengthened it.

Conflicts of Interest

The authors declare no conflicts of interest.

Abbreviations

AcronymDefinition
ABAlberta
BCBritish Columbia
BCEBC Energy Regulator
CAIPCarbon Action Incentive Payment
CBCCanadian Broadcasting Corporation
CCRCanada Carbon Rebate
CCSCarbon capture and storage
CERCanada Energy Regulator
CO2Carbon dioxide
CO2eCarbon dioxide equivalent
COPConference of the Parties
CRACanada Revenue Agency
CTVCTV Television Network
ECCCEnvironment and Climate Change Canada
ETSEmissions Trading System
EUEuropean Union
GDPGross domestic product
GJGigajoules
GWhGigawatt-hour
GNWTGovernment of the Northwest Territories
GSTGoods and services tax
HSTHarmonized sales tax
ICAPInternational Carbon Action Partnership
IEAInternational Energy Agency
JLWJustice Laws website
kmKilometre
kWhKilowatt-hour
LDPTLight duty passenger truck
LDPVLight duty passenger vehicle
MBManitoba
m2Metres squared
NBNew Brunswick
NLNewfoundland and Labrador
NSNova Scotia
NSPNova Scotia Power
NTNorthwest Territories
NUNunavut
OBPSOutput-based pricing system
OECDOrganisation for Economic Co-operation and Development
ONOntario
PBOParliamentary Budget Officer
PEPrince Edward Island
PEIPrince Edward Island
PMOPrime Minister’s Office
PSTProvincial sales tax
QCQuebec
SASingle-attached
SKSaskatchewan
UNFCCCUnited Nations Framework Convention for Climate Change
USDUnited States dollars
YKYukon

Appendix A

Canada is the world’s second largest country by area, occupying most of the northern half of North America. It is bounded by three oceans, the Atlantic (east coast), Pacific (west coast), and the Arctic (north), and the United States to the south and northwest. The country is a federation consisting of ten provinces and three territories [99]. The provinces and territories all have their own elected legislatures, headed by a premier, responsible for programs such as education, healthcare, and natural resources. The federal government, led by the prime minister, has representatives elected by citizens of the provinces and territories. The responsibilities of the federal, provincial, and territorial governments are defined in the Constitution Acts, 1867 and 1982 [100]. Some responsibilities, such as the environment, are shared and have led to disagreements between various levels of government.
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Figure A1. Map of Canada showing the ten provinces (BC: British Columbia; AB: Alberta; SK: Saskatchewan; MB: Manitoba; ON: Ontario; QC: Quebec; NB: New Brunswick; NL: Newfoundland and Labrador; PE: Prince Edward Island; and NS: Nova Scotia) and three territories (YK: Yukon; NT: Northwest Territories; and NU: Nunavut).
Figure A1. Map of Canada showing the ten provinces (BC: British Columbia; AB: Alberta; SK: Saskatchewan; MB: Manitoba; ON: Ontario; QC: Quebec; NB: New Brunswick; NL: Newfoundland and Labrador; PE: Prince Edward Island; and NS: Nova Scotia) and three territories (YK: Yukon; NT: Northwest Territories; and NU: Nunavut).
Energies 17 05802 g0a1

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Figure 1. Changes in the price of a litre of gasoline under the federal backstop and Nova Scotia’s system.
Figure 1. Changes in the price of a litre of gasoline under the federal backstop and Nova Scotia’s system.
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Figure 2. Effect of 2023–2024 CAIP rebates for oil-heated households in Nova Scotia.
Figure 2. Effect of 2023–2024 CAIP rebates for oil-heated households in Nova Scotia.
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Figure 3. Effect of 2023–2024 CAIP rebates on electrically heated households in Nova Scotia.
Figure 3. Effect of 2023–2024 CAIP rebates on electrically heated households in Nova Scotia.
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Figure 8. Percent breakdown of household heating systems by province (horizontal axis denotes province and its number of heating systems × 1000; electric + refers to dual systems of electricity plus natural gas or heating oil; wood + refers to dual systems of wood plus electricity or heating oil).
Figure 8. Percent breakdown of household heating systems by province (horizontal axis denotes province and its number of heating systems × 1000; electric + refers to dual systems of electricity plus natural gas or heating oil; wood + refers to dual systems of wood plus electricity or heating oil).
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Figure 9. A comparison of the carbon tax on natural gas and heating oil for space heating at $65/tonne of CO2e.
Figure 9. A comparison of the carbon tax on natural gas and heating oil for space heating at $65/tonne of CO2e.
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Table 1. Example carbon price on selected energy sources for 2023–2024 to 2030 [29] (Canadian dollars).
Table 1. Example carbon price on selected energy sources for 2023–2024 to 2030 [29] (Canadian dollars).
Energy SourceUnitsAnnual Price (Fiscal Year: 1 April to 31 March)
2023–20242024–20252025–20262026–20272027–20282028–20292029–2030After 1 April 2030
Carbon priceTonne$65$80$95$110$125$140$155$170
GasolineLitre$0.1431$0.1761$0.2091$0.2422$0.2752$0.3082$0.3412$0.3743
Light heating oilLitre$0.1738$0.2139$0.254$0.2941$0.3342$0.3743$0.4144$0.4545
PropaneLitre$0.1006$0.1238$0.147$0.1703$0.1935$0.2167$0.2399$0.2631
Natural gasCubic metres$0.1239$0.1525$0.1811$0.2097$0.2383$0.2669$0.2954$0.3240
Table 2. Urban and rural per-person and four-person household CAIP amounts for fiscal year 2023–2024 [40,42].
Table 2. Urban and rural per-person and four-person household CAIP amounts for fiscal year 2023–2024 [40,42].
ABSKMBONNBNSPEINL
Urban
First adult$772$680$528$488$276$496$480$656
Second adult$386$340$264$244$138$248$240$328
Each child$193$170$132$122$69$124$120$164
Family of 4$1544$1360$1056$976$552$992$960$1312
Rural
First adult$849$748$581$537$304$546$480$722
Second adult$425$374$290$268$152$273$240$361
Each child$212$187$145$134$76$136$120$180
Family of 4$1698$1496$1162$1074$607$1091$960$1443
Table 3. Urban and rural per-person and four-person household Canada Climate Rebate amounts for fiscal year 2024–2025 [44].
Table 3. Urban and rural per-person and four-person household Canada Climate Rebate amounts for fiscal year 2024–2025 [44].
ABSKMBONNBNSPEINL
Urban
First adult$900$752$600$560$380$412$440$596
Second adult$450$376$300$280$190$206$220$298
Each child$225$188$150$140$95$103$110$149
Family of 4$1800$1504$1200$1120$760$824$880$1192
Rural
First adult$1080$902$720$672$456$494$440$715
Second adult$540$451$360$336$228$247$220$358
Each child$270$226$180$168$114$124$110$179
Family of 4$2160$1805$1440$1344$912$989$880$1430
Table 4. Comparison of Saskatchewan and Nova Scotia’s populations [47], sizes [48], GDPs [49], and major industries [50].
Table 4. Comparison of Saskatchewan and Nova Scotia’s populations [47], sizes [48], GDPs [49], and major industries [50].
SaskatchewanNova Scotia
Population1.169 million0.994 million
Size (km2)651,03655,284
GDP$77.9 billion$43.8 billion
Major industriesOil and natural gas, mining, construction, agriculture, forestryProfessional, scientific, technical, tourism
Table 5. Energy mixes for SaskPower and Nova Scotia Power 2023–2024 [52,53].
Table 5. Energy mixes for SaskPower and Nova Scotia Power 2023–2024 [52,53].
Energy SourceSaskPower (2023–2024)Nova Scotia Power (2023–2024)
GWhPercentGWhPercent
Natural gas10,57540.0%194617.5%
Coal842431.9%308627.7%
Oil and petcoke00.0%6986.3%
Imports18066.8%8817.9%
Hydroelectricity324412.3%260123.4%
Wind21778.2%179916.2%
Other2000.8%1281.1%
Total26,426 11,139
Table 6. Annual CAIP (2023–2024) for Saskatchewan and Nova Scotian households [40] (values have been rounded).
Table 6. Annual CAIP (2023–2024) for Saskatchewan and Nova Scotian households [40] (values have been rounded).
Number of OccupantsSaskatchewan
(Four Quarters)		Nova Scotia
(Three Quarters)
UrbanRuralUrbanRural
2 people$1020$1122$558$614
3 people$1190$1309$651$716
4 people$1360$1496$744$818
Table 7. Quarterly and annual Canada Climate Rebate (2024–2025) for Saskatchewan and Nova Scotian households [44] (values have been rounded).
Table 7. Quarterly and annual Canada Climate Rebate (2024–2025) for Saskatchewan and Nova Scotian households [44] (values have been rounded).
Number of OccupantsSaskatchewan
(Four Quarters)		Nova Scotia
(Four Quarters)
UrbanRuralUrbanRural
2 people$1128$1354$618$742
3 people$1316$1579$721$865
4 people$1504$1805$824$989
Table 8. Household energy requirements in Saskatchewan [54].
Table 8. Household energy requirements in Saskatchewan [54].
ServiceApartmentSingle-AttachedSingle-Detached
Households (×1000)Energy (PJ)GJ/HHHouseholds
(×1000)		Energy (PJ)GJ/HHHouseholds
(×1000)		Energy (PJ)GJ/HH
Space heating78.882.9337.0829.971.6755.62326.0526.6681.76
Hot water 1.4117.89 0.6321.09 8.2325.26
Appliances 1.0513.27 0.4214.01 4.9415.16
Lighting 0.111.35 0.051.69 1.504.61
Total (GJ) 69.59 92.42 126.78
Table 9. Household energy requirements in Nova Scotia [55].
Table 9. Household energy requirements in Nova Scotia [55].
ServiceApartmentSingle-AttachedSingle-Detached
Households
(×1000)		Energy
(PJ)		GJ/HHHouseholds
(×1000)		Energy
(PJ)		GJ/HHHouseholds
(×1000)		Energy
(PJ)		GJ/HH
Space heating94.052.2824.2529.251.6054.62279.1319.2869.06
Hot water 1.1312.01 0.4916.63 4.2115.07
Appliances 0.9910.52 0.3712.75 3.6613.12
Lighting 0.111.13 0.072.52 1.033.69
Total (GJ) 47.91 86.53 100.95
Table 10. Provincial light duty passenger vehicle and truck and population data [47].
Table 10. Provincial light duty passenger vehicle and truck and population data [47].
RowMetricSaskatchewanNova Scotia
LDPVLDPTLDPVLDPT
R1Average distance driven (km)15,70116,56116,71018,021
R2Fuel consumption (L 100 km)8.48411.2936.37810.068
R3Vehicle stock269,267420,053345,550299,667
R4Total population1,168,9011,168,901993,946993,946
R5Total annual consumption per vehicle (L) [R1 × R2/100]1332187010661814
R6Vehicles/person [R3/R4]0.2300.3590.3480.301
R7Annual consumption (L)/person306.8672.1370.5547.0
Table 11. Estimated number of litres of gasoline consumed per household.
Table 11. Estimated number of litres of gasoline consumed per household.
Number of OccupantsSaskatchewanNova Scotia
2 people19581835
3 people29372752
4 people39163670
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Hughes, L.; Landry, S. The Pushback Against Canada’s Carbon Pricing System: A Case Study of Two Canadian Provinces, Saskatchewan and Nova Scotia. Energies 2024, 17, 5802. https://doi.org/10.3390/en17225802

AMA Style

Hughes L, Landry S. The Pushback Against Canada’s Carbon Pricing System: A Case Study of Two Canadian Provinces, Saskatchewan and Nova Scotia. Energies. 2024; 17(22):5802. https://doi.org/10.3390/en17225802

Chicago/Turabian Style

Hughes, Larry, and Sarah Landry. 2024. "The Pushback Against Canada’s Carbon Pricing System: A Case Study of Two Canadian Provinces, Saskatchewan and Nova Scotia" Energies 17, no. 22: 5802. https://doi.org/10.3390/en17225802

APA Style

Hughes, L., & Landry, S. (2024). The Pushback Against Canada’s Carbon Pricing System: A Case Study of Two Canadian Provinces, Saskatchewan and Nova Scotia. Energies, 17(22), 5802. https://doi.org/10.3390/en17225802

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