The provincial government is expressing disappointment with the federal government’s decision to impose its federal carbon tax backstop on the province as of July 1, 2023.

The province had been seeking exemptions to account for those who heat with oil and fish harvesters who use diesel in their vessels in order to make a living.

The province says the federal government’s decision does not reflect the pressures that residents are facing with the rising cost of living, or the “meaningful” changes Newfoundland and Labrador has made to address climate change and being a leader in the transition to cleaner energy.

The carbon tax in Newfoundland and Labrador was charged by the provincial government, but did not include home heating fuel and a number of other uses. Now the province will have to repeal its legislation and will no longer collect the carbon tax. Residents will receive Climate Action Incentive Payments directly from the Federal Government once the new federal system is implemented next year.

Premier Furey in his September 2, 2022 correspondence to the Federal Minister of Environment and Climate Change said:

“The current price signals being provided by the market are far stronger than the signals that removal of these exemptions would have provided under normal economic circumstances, and they are already generating the changes in perspective and behaviour that the Federal Government desires.”