Carbon pricing

Putting a price on carbon pollution in Canada is essential for a fair and effective climate plan.

What is carbon pricing?

Restricting the pollution that causes climate change makes sense. The more someone pollutes, the more they ought to pay. A carbon price makes polluting more expensive and solutions like clean energy and electric vehicles more affordable.

Economists believe that carbon pricing is the most effective way to reduce the carbon pollution that is changing our climate. Seventy national and subnational governments have introduced a price on carbon pollution.

Accelerating the transition to a carbon-free future

Solutions to climate change are already at our disposal. Renewable energy, electric vehicles and fast, reliable public transportation can lead the way to a carbon-free future. Carbon pricing creates an incentive across the economy to shift to lower-carbon activities and behaviour.

Pricing carbon is fair. The organizations and people that create the most carbon pollution pay for the damage of their pollution. Governments can channel funds raised from pricing carbon pollution to provide better options for people to reduce their carbon footprints.

We need a fair response to climate change because all people living in Canada feel its impact. We need an effective response to climate change because we all benefit from least-cost solutions. We need to act urgently because extreme events from a rapidly changing climate are harmful to human health.

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How does pricing carbon pollution build more sustainable communities?

Putting a price on carbon pollution through a carbon tax or cap-and-trade system helps speed the transition to cleaner, better energy solutions. We have low-carbon alternatives to our largest emissions sources that are improving by the day.

Renewable energy

Wind, solar and other low-impact ways to generate electricity reduce the need for fossil fuels and offer cleaner and less expensive solutions than nuclear power and large hydro projects. Investing in small-scale, community-owned renewable energy projects stimulates local economies and creates energy independence.

Photo: 10 10 via Flickr

Public transportation

Fast, reliable public transportation networks make communities more livable. They get cars off the road, reduce congestion, relieve commuting stress and offer countless health benefits. Fewer cars on the road makes it easier to move goods and benefits local economies.

Photo: kwan fung via Unsplash

Low-carbon infrastructure

Carbon pricing can make it easier to expand active transportation choices like bike lanes and walking paths and build electric vehicle charging stations. You save time and money and improve your health.

Photo: Green Energy Futures via Flickr

Low-carbon lifestyles

Using carbon pricing funds for consumer incentive programs can help people switch to energy-saving options like better insulated homes or electric vehicles.

Photo: Oregon Department of Transportation via Flickr

Carbon pricing facts


Carbon pricing decreases emissions

Fact: Since it was introduced in 2008, B.C.’s carbon tax decreased carbon emissions, according to research. The same holds true in other jurisdictions that price carbon emissions.


Rebates benefit individuals and families

Fact: Research shows that people in B.C. — where the provincial government sends out rebates from its carbon tax — pay less tax than they did before the carbon price was implemented.


Renewable energy is increasingly affordable

Fact: The price of renewable energy is now equal to or cheaper than coal power. Fossil fuels only appear to be affordable due to government subsidies ($3B a year in Canada) and the absence of a price on carbon emissions.

Pricing pollution across Canada

A win at the Supreme Court

The David Suzuki Foundation has been advocating for carbon pricing as a climate solution since 1998, in reports, advocacy and the courts.

Saskatchewan, Ontario and Alberta took the federal government to court to challenge the constitutionality of the Greenhouse Gas Pollution Pricing Act. Represented by Ecojustice lawyers and acting as an intervener, we sided with the federal government’s authority to put in place a national minimum price on carbon pollution. We were the first organization to argue in court that the climate emergency is an issue of national concern and warrants a national emergency response.

In March 2021, the Supreme Court agreed that climate change was a matter of national concern that justified Parliament’s authority to enact laws under the Constitution’s “peace, order and good government” clause.

Judges found that climate change poses a grave threat to humanity’s future. They validated federal law aimed at limiting the harms from one province on another. The court noted that a lack of co-operation among provinces could expose other provinces to “grave harm.”

The court found that the act recognizes jurisdiction for a pricing mechanism, not greenhouse gas emissions more broadly. Provinces can still address climate change with their own laws and regulations.

What does this decision mean for climate action?

The decision was specifically about carbon pricing, but it signals that the federal government has the authority to enact national climate and clean energy regulations. By confirming that the federal government has the legal authority to take co-ordinated, national action and impose a minimum carbon price, the ruling means Canada can ensure that no province creates a stumbling block to progress being made in other parts of the country. It’s an essential part of responding to the climate emergency.

Climate change is a threat of the highest order to the country, and indeed the world. The undisputed existence of a threat to the future of humanity cannot be ignored. A provincial failure to act directly threatens Canada as a whole.

Supreme Court of Canada

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