On October 5, 2016, the House of Commons approved Prime Minister Justin Trudeau’s October 3, 2016 motion to impose a carbon tax starting in 2018. Pursuant to Trudeau’s plan, the federal government will set a minimum price of $10 per tonne of carbon emissions in 2018 and the price will rise by $10 each year to $50 per tonne in 2022.

The provinces and territories can choose to implement a direct carbon tax or adopt a cap-and-trade system which meets or exceeds the federal minimum price. The federal government will impose a direct carbon tax in any provinces or territories which fail to have a price or cap-and trade system is in place by 2018.