Environment, energy & climateCanada

In forceRemoved from law by S.C. 2026, c. 2 (provisions deemed in force from 1 April 2025); the repeal of Part 1 as a whole takes effect on 1 April 2035.

Removal of the consumer carbon price (federal fuel charge), 2025

Since 1 April 2025 the federal fuel charge — the « consumer carbon price » in force since 2019, $80 (Canadian) per tonne in 2024-25 — has been set at zero, and households received a final Canada Carbon Rebate in April 2025. The Making Life More Affordable for Canadians Act (royal assent on 12 March 2026) removes it from law; the repeal of Part 1 of the Greenhouse Gas Pollution Pricing Act as a whole takes effect on 1 April 2035. Industrial carbon pricing (Part 2, output-based pricing system) remains.

Updated: November 5, 2026Next milestone: April 1, 2035 — Repeal of Part 1 of the Act, of Schedule 2 and of the Fuel Charge Regulations takes effect

At a glance

Reference text

Making Life More Affordable for Canadians Act (S.C. 2026, c. 2), Part 3 — Amendments to the Greenhouse Gas Pollution Pricing Act and the Fuel Charge Regulations[1][4]

No. S.C. 2026, c. 2 (Bill C-4, 45th Parliament) · March 12, 2026

Read the text ↗

Carried by

  • Mark Carney[7][5][6]Prime Minister — ended the application of the fuel charge on taking office (announcement of 14 March 2025) · 2025 · Initiator
  • François-Philippe Champagne[4][5]Minister of Finance and National Revenue — sponsor of Bill C-4 · 2025-2026 · Implementation

Implementation

  • Department of Finance Canada
  • Minister of National Revenue / Canada Revenue Agency — administration of Part 1 (fuel charge) and of the Canada Carbon Rebate
  • Environment and Climate Change Canada — Part 2 (industrial pricing), which remains

Status

In force

since March 12, 2026[1][4]

Removed from law by S.C. 2026, c. 2 (provisions deemed in force from 1 April 2025); the repeal of Part 1 as a whole takes effect on 1 April 2035.

Stated objective

Lower the cost of living — the cancellation is presented as « the first step » so that Canadians « keep more of their hard-earned money » — while refocusing federal carbon pricing on large industrial emitters, which the government calls one of its most important measures to meet the 2030 emissions reduction target.[5][7]

According to the Minister of Finance and National Revenue (House of Commons, 6 June 2025) and Budget 2025

Main measures

  • Rates at zero: regulation SOR/2025-107 replaces every rate of charge applicable after 31 March 2025 with zero, for all fuels (gasoline: 17.61 cents per litre in 2024-25; marketable natural gas: 15.25 cents per cubic metre).[2]
  • Provinces and territories are no longer required to have a consumer-facing carbon price, from 1 April 2025.[7][9]
  • End of the Canada Carbon Rebate: a final quarterly payment from April 2025; the other return mechanisms (small and medium-sized businesses, farmers, Indigenous governments) are wound down.[8][7]
  • Repeal in law (Part 3 of Bill C-4): the provisions applying the charge are repealed with effect from 1 April 2025, other provisions (rebates, registration) on 1 October and 1 November 2025, and Part 1 as a whole, Part 1 of Schedule 1, Schedule 2 (rates) and the Fuel Charge Regulations on 1 April 2035.[1]
  • Industrial pricing kept: Part 2 of the Act (output-based pricing system for industry, where the federal system applies) remains; its excess emissions charge is set at $95 per tonne for 2025, rising by $15 a year to $170 in 2030.[2][9]

In data

Inflation (CPI)

3.1%

Q3 2026

Statistics Canada attributes most of the fall in gasoline prices in April 2025 to the removal of the consumer carbon price.

Statistics CanadaSee the card →

GHG emissions

768MtCO2e

2024

World BankSee the card →

Key figures

Consumer price inflation

1.7%

April 2025, year over year · Observed

Statistics Canada[10]

2.3% in March 2025; gasoline −18.1% and energy −12.7% year over year in April.

Consumer price inflation, one year later

2.8%

April 2026, year over year · Observed

Statistics Canada[11]

The April 2025 removal no longer weighs on the 12-month comparison (base-year effect), among other factors cited by Statistics Canada.

Net cost of the fuel charge for the average Ontario household, including income effects

0.7%

2030-31, at $170 per tonne (share of disposable income) · Projection

according to the Parliamentary Budget Officer (October 2024), before the removal[12]

Counting only the charge, the related GST and the rebate, the same household would instead have had a net gain of 0.3% of disposable income.

Projected 2030 emissions, reduction from 2005

33.5%

2030 (low-gap scenario) · Projection

according to the Parliamentary Budget Officer (November 2025), after the 2025 federal policy revisions[13]

31.5% in the high-gap scenario. The removal of the consumer carbon price accounts for 3 to 13 Mt of the 2030 increase, according to two Environment and Climate Change Canada estimates.

Legislated 2030 target, reduction from 2005 (lower bound of 40-45%)

40%

2030 · Announced

Canadian Net-Zero Emissions Accountability Act (target = Canada’s nationally determined contribution), as stated by the Parliamentary Budget Officer[14][13]

Timeline

  1. The Greenhouse Gas Pollution Pricing Act is enacted[3][2]

    Section 186 of the Budget Implementation Act, 2018, No. 1 enacts the Act: Part 1 (fuel charge) and Part 2 (industrial greenhouse gas emissions).

  2. First fuel charge rates apply[2][12]

    $20 per tonne in 2019-20; for gasoline, 4.42 cents per litre in the provinces listed by the Act.

  3. Last rate increase: $80 per tonne[2][12]

    Rates for 1 April 2024 – 31 March 2025: 17.61 cents per litre of gasoline, 15.25 cents per cubic metre of marketable natural gas; the price was scheduled to reach $170 per tonne in 2030-31.

  4. Parliamentary Budget Officer: updated distributional analysis of the fuel charge[12]

    Counting only the charge and the rebate, the average household of each province where it applied comes out ahead in 2030-31; including the estimated loss of employment and investment income, each of them bears a net cost.

  5. Announced

    The government announces that the fuel charge will cease to apply on 1 April 2025[7]

  6. In force

    Fuel charge rates set at zero[2][13][11]

    By regulation (SOR/2025-107): every rate of charge applicable after 31 March 2025 is zero; Part 1 of the Act stays in law.

  7. Final Canada Carbon Rebate payment[8][7]

    A final quarterly payment, starting in April 2025, to eligible households of the provinces where the charge applied.

  8. Statistics Canada: inflation slows to 1.7% in April 2025[10]

    Energy prices fall 12.7% year over year; gasoline falls 18.1%, mainly because of the removal of the consumer carbon price. Quebec, which has its own cap-and-trade system, was not affected.

  9. Bill C-4 introduced in the House of Commons[4]

  10. Second reading in the House: 335 votes to 0[4]

  11. Budget 2025: return mechanisms wound down[9][8]

    Pollution pricing proceeds fall from $13.6 billion in 2024-25 to $0.0 billion from 2025-26; the budget proposes that no Canada Carbon Rebate be paid on returns or adjustment requests filed after 30 October 2026.

  12. Parliamentary Budget Officer: Canada’s 2030 emissions gap[13]

    Ending the consumer carbon price adds 3 to 13 Mt to projected 2030 emissions (two estimates by Environment and Climate Change Canada); with the other federal revisions of 2025, the gap to the target would be 49 to 102 Mt.

  13. Third reading in the House of Commons[4]

  14. Third reading in the Senate[4]

  15. In force

    Royal assent of Bill C-4: the removal is written into law[1][4]

    Removed from law by S.C. 2026, c. 2 (provisions deemed in force from 1 April 2025); the repeal of Part 1 as a whole takes effect on 1 April 2035.

  16. The removal drops out of the 12-month inflation comparison[11]

    Consumer prices rise 2.8% year over year in April 2026 (2.4% in March); Statistics Canada cites a base-year effect of the April 2025 removal on gasoline and natural gas, alongside other factors.

  17. Upcoming — the outcome is not known

    Repeal of Part 1 of the Act, of Schedule 2 and of the Fuel Charge Regulations takes effect[1][2]

    Date fixed by section 42 of S.C. 2026, c. 2; until then Part 1 stays in the consolidated Act, partly repealed, with its rates at zero.

The debate

Citoyen takes no position: arguments are reported as their authors put them.

According to its supporters

  • The Minister of Finance presents the cancellation as the first step to let Canadians keep more of their money, and holds that a price on pollution for large emitters remains « a pillar » of Canada’s plan, industrial carbon pricing being one of the most important measures to meet the 2030 target.[5]
  • The Prime Minister justifies the final rebate payment as help for families in transition, recalls that all members agreed to scrap the consumer carbon tax and that provinces, Quebec included, could choose their own pricing system.[6]
  • The Conservative opposition supports the removal but calls it « half measures »: it asks for the industrial carbon price to be repealed as well, arguing that it undermines competitiveness amid US tariffs and is ultimately passed on to consumers.[5]

According to its opponents

  • Green Party MP Elizabeth May defends the consumer carbon price as a good idea and an efficient market mechanism, and argues for a revenue-neutral « carbon fee and dividend ».[6]
  • For the NDP (Gord Johns), with wildfires burning across several provinces, nothing is planned any more to fund greener homes, heat pumps or energy efficiency: a sign that the climate emergency is not being taken seriously.[5]
  • The Bloc Québécois denounces the final rebate, paid without the levy having been collected: according to its MPs, about $3.7 billion paid outside Quebec, which (like British Columbia) received nothing but contributed through federal taxes — some $800 million for Quebeckers.[5][6]

Indicators to watch

  • Inflation (CPI) · Statistique Canada / OCDESee the card →
  • Greenhouse gas emissions · Banque mondialeSee the card →
  • Gasoline and natural gas prices (CPI components) · Statistique Canadano Citoyen card yet
  • Projected emissions vs the 2030 target · ECCC / DPBno Citoyen card yet
  • Industrial carbon price (output-based pricing system) · ECCCno Citoyen card yet

Sources

  1. [1]Making Life More Affordable for Canadians Act, S.C. 2026, c. 2 (Bill C-4) — assented to 2026-03-12 — Justice Laws Website (Department of Justice Canada), March 12, 2026
  2. [2]Greenhouse Gas Pollution Pricing Act (S.C. 2018, c. 12, s. 186) — consolidated text current to 2026-10-19, incl. Schedule 2 (fuel charge rates, as amended by SOR/2025-107), Schedule 4 and amendments not in force — Justice Laws Website (Department of Justice Canada), October 19, 2026
  3. [3]Budget Implementation Act, 2018, No. 1, S.C. 2018, c. 12 — assented to 2018-06-21 — Justice Laws Website (Department of Justice Canada), June 21, 2018
  4. [4]C-4 (45-1) — An Act respecting certain affordability measures for Canadians and another measure — stages and votes — LEGISinfo, Parliament of Canada
  5. [5]House of Commons Debates, 45th Parliament, 1st Session, No. 010 (Friday, June 6, 2025) — Making Life More Affordable for Canadians Act, second reading — House of Commons of Canada, June 6, 2025
  6. [6]House of Commons Debates, 45th Parliament, 1st Session, No. 013 (Wednesday, June 11, 2025) — Oral Questions (Carbon Pricing) and debate on Bill C-4 — House of Commons of Canada, June 11, 2025
  7. [7]Budget 2025 — Annex 6: Impacts report (« Cancelling the Divisive Consumer Carbon Price ») — Government of Canada (Department of Finance), November 4, 2025
  8. [8]Budget 2025 — Tax measures: Supplementary information (« Canada Carbon Rebate ») — Government of Canada (Department of Finance), November 4, 2025
  9. [9]Budget 2025 — Annex 1: Details of economic and fiscal projections (« Changes to the Pollution Pricing System Since FES 2024 ») — Government of Canada (Department of Finance), November 4, 2025
  10. [10]The Daily — Consumer Price Index, April 2025 — Statistics Canada, May 20, 2025
  11. [11]The Daily — Consumer Price Index, April 2026 — Statistics Canada, May 19, 2026
  12. [12]A Distributional Analysis of the Federal Fuel Charge – Update (RP-2425-017-S) — Office of the Parliamentary Budget Officer, October 10, 2024
  13. [13]Estimating Canada’s 2030 Emissions Gap (RP-2526-021-S) — Office of the Parliamentary Budget Officer, November 26, 2025
  14. [14]Canadian Net-Zero Emissions Accountability Act (S.C. 2021, c. 22) — consolidated text — Justice Laws Website (Department of Justice Canada)