Stepping Up To The Plate: Canada Releases Draft Legislation For Proposed Federal "Backstop" Carbon Pricing System

On January 15, 2018, Environment and Climate Change Canada (ECCC) released draft legislative proposals relating to the proposed federal "backstop" system (Backstop) for establishing, regulating, and enforcing a pan-Canadian price on carbon, as well as the proposed regulatory framework for the output-based pricing system, which is designed to minimize competitiveness risks for emissions-intensive, trade-exposed industrial facilities. The proposed Backstop will apply in provinces and territories that request it and in those that do not have a carbon pricing system in place that meets the federal standard by January 1, 2019. Canada's overarching objective in establishing this regulatory framework is to ensure a price is placed on carbon across Canada, thereby encouraging a low-carbon economy focused on sustainable development. For industry participants, the impact of the proposals is potentially significant, as they set the baseline expectations for carbon pricing regimes