The provincial government has announced its long-awaited blueprint for carbon pricing, to come into effect January 1.
Residents will not be taxed on home heating fuels. The four cent temporary gas tax will be replaced with a federally-mandated 4.42 cent carbon tax, which equates to $20 dollars per tonne.
The five cents of additional gas tax on diesel will be eliminated and replaced with a federally-mandated 5.37 cent carbon tax.
There will be exemptions for those who generate diesel electricity off the grid, aviation fuel, the provincial ferry system and municipalities.
Several pieces of legislation will need to be amended in the upcoming session of the House of Assembly including changes to the Revenue Administration Act, the Management of Greenhouse Gas Act and the Atlantic Accord Implementation Act.
The federal government is imposing a federal carbon plan on the provinces of Saskatchewan, Manitoba, Ontario and New Brunswick after they refused to put together a tax plan.
Carbon Pricing a Step in the Right Direction: NEIA
Meanwhile, the Newfoundland and Labrador Environmental Industry Association is applauding the provincial carbon tax. NEIA says as a contributor to the effects of climate change, it accepts responsibility to take action.
Executive Director Kieran Hanley says carbon pricing is an effective tool to decrease greenhouse gas emissions while still allowing for economic growth.
While there are some concerns about possible impacts on the economy, Hanley says government can help ease the strain on businesses by making use of generated revenue. He says it opens opportunities for reduced taxation elsewhere, offering rebates, or providing incentives for companies to add clean technology in their operations.