Government launches consultations on border carbon adjustments

Import charges could be applied to goods from certain countries and export rebates could be provided to certain Canadian producers

The Government of Canada launched consultations on border carbon adjustments which would be used to level the playing field for Canadian business by ensuring that imported goods are subject to the same carbon pricing as domestically produced goods and that exported goods are not disadvantaged in markets with lower, or no, carbon pricing.

The border carbon adjustments could generally take the following forms:

  • Import charges applied to goods from countries that either do not have carbon pricing or apply a lower carbon price to ensure that they face similar carbon costs (such as per unit of emission resulting from the production of a good) to those that apply to domestic producers.

  • Other measures that can apply a carbon price to imported goods could include a domestic tax or charge levied on both high-carbon domestic and imported products or a requirement that emission allowances be purchased for imported goods based on their carbon intensity.

  • Export rebates could be provided to producers so that domestically produced goods compete on equal footing in foreign markets, alongside goods from countries with limited or no carbon pricing.

Link: Consultation Paper: Exploring Border Carbon Adjustments for Canada