Bill 52, entitled the Act concerning the implementation of the Québec Energy Strategy and amending various legislative provisions, which came into force last December, amended the Act respecting the Régie de l'énergie (the "Act") in order to confer upon the Régie de l'énergie the power to establish an annual duty on fuels and natural gas to be paid into the Québec Green Fund. As a result of these amendments, Chapter VI.3 entitled Financing of measures to reduce greenhouse gas emissions and adapt to climate change was added to the Act and applies to a natural gas distributor, a person or partnership that brings fuel to Québec for the production of electricity, as well as a distributor of fuel, excluding hydrocarbons used as raw material by industries that transform hydrocarbon molecules through chemical and petrochemical processes. Accordingly, any such distributor must file with the Régie de l'énergie a declaration indicating, namely, the volumes of natural gas distributed or the volume of sales of fuel intended for consumption in Québec that was refined in or brought into the province.
The Québec government thus tabled in June the draft Regulation respecting the annual duty payable to the Green Fund (the "Draft Regulation") intended to establish the rate and method of calculation of the annual duty payable by a distributor on the basis of the carbon dioxide (CO2) emissions generated by the combustion of natural gas and fuel and the conditions on which distributors must pay the annual duty to the Green Fund created under Section 15.1 of the Act respecting the Ministère du Développement durable, de l'Environnement et des Parcs. According to the Draft Regulation, the annual duty payable to the Green Fund is the amount obtained by multiplying the applicable rate by the quantity of CO2 emissions attributable to the distributor. The applicable rate, 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 determined pursuant to the Draft Regulation. For this purpose the quantity of CO2 emissions attributable to a distributor is the product obtained by multiplying the CO2 emission coefficients, listed in the Schedule to the Draft Regulation, by the respective volumes of natural gas, gasoline, diesel fuel, light heating oil, heavy heating oil, propane and petroleum coke or by the respective mass of the various varieties of coal that is attributable to the distributor. The volume and mass will be determined by the Régie de l'énergie on the basis of the distributor's annual statement for the preceding fiscal year. The total quantity of CO2 emissions will be determined by calculating the sum of the CO2 emissions determined for all distributors.
The annual duty will be payable to the Minister of Sustainable Development, Environment and Parks in four equal instalments on the first day of October, January, April and July of each year, the first instalment of the annual duty being payable on the first day of the quarter occurring after the date of coming into force of the Draft Regulation. For the purposes of the Draft Regulation, the CO2 emission coefficient is the mass in grams of CO2 generated by the combustion of one unit of natural gas or fuel per cubic metre, per litre or per unit of coal mass in kilograms. For instance, the Schedule sets the CO2 emission coefficient for natural gas at 1,891 g/m³, for gasoline at 2,360 g/l, for diesel at 2,730 g/l and for light heating oil at 2,830 g/l.