On November 28, 2007, the Quebec government made the Regulation respecting the annual duty payable to the Green Fund pursuant to the Act respecting the Régie de lénergie (the "Act"). The order in council that establishes the annual duty to be paid into the Green Fund, or carbon tax as it has been popularly labelled, was published in the Gazette officielle du Québec on November 29, 2007 and will come into effect on December 14, 2007.

The duty to be paid by a "distributor" is determined by multiplying the applicable rate indicated in the schedule to the Regulation by the quantity of carbon dioxide ("CO2") emissions attributable to a distributor. The applicable rate, calculated in dollars per tonne of CO2 emissions, is determined each year by dividing the annual financial investment in the Green Fund by the total quantity of CO2 emissions from natural gas, gasoline, diesel fuel, light heating oil, heavy heating oil, propane, petroleum coke, anthracite coal, Canadian bituminous coal and American bituminous coal. According to the schedule, the "CO2 emissions coefficient" is the mass in grams of CO2 generated by the combustion of one unit of natural gas or fuel per cubic meter, per litre or per unit of petroleum coke or coal mass in kilograms. The quantity of CO2 emissions attributable to a distributor will thus be obtained by multiplying the CO2 emission coefficients listed in the schedule by the respective volumes of natural gas or aforementioned fuels attributable to the distributor. According to the schedule, the coefficient for natural gas has been set at 1,891,g/m³, for gasoline at 2,360 g/l, diesel fuel at 2,730 g/l, light heating oil at 2,830 g/l, heavy heating oil at 3,090 g/l, propane at 1,500 g/l, petroleum coke at 3,190 g/kg, anthracite coal at 2,390 g/kg, Canadian bituminous coal at 2,249 g/kg and American bituminous coal at 2,343 g/kg.

The annual duty is payable by a distributor in four equal instalments on 31 December, 31 March, 30 June and 30 September of each year. The Regulation should be read together with the provisions of Chapter VI.3 of the Act entitled "Financing of Measures to Reduce Greenhouse Gas Emissions and Adapt to Climate Change". The chapter and the regulation apply to natural gas distributors, legal persons or partnerships that bring fuel into Québec for a purpose other than resale, and distributors of fuel. The term "fuel distributor" means a person (1) that refines, manufactures, mixes, prepares or distils fuels in Québec, (2) that brings or causes to be brought into Québec fuel contained in one or more receptacles with a total capacity of over 200 litres, except fuel contained in a fuel tank installed as standard equipment to supply the engine of a vehicle, and (3) that, in Québec, exchanges fuel with a person described in (1).

According to section 85.37 of the Act, a distributor must file with the Régie de l'énergie a statement specifying the volume of natural gas it distributed or the volume of sales of fuel intended for consumption in Québec that was refined in Québec or brought into Québec during its preceding fiscal year and, where applicable, the volume of gasoline, diesel fuel, heating oil, propane, petroleum coke or coal acquired during its preceding fiscal year. The first instalment of the annual duty for the period extending from October 1st, 2007 to September 30, 2008 will be payable on December 31, 2007.