Federal Government Proposes Four-Phase Repeal of Consumer Carbon Price Framework
The federal government has announced proposed legislative changes to permanently repeal the fuel charge framework under Part 1 of the Greenhouse Gas Pollution Pricing Act, following regulations enacted in March that ceased the federal fuel charge as of April 1, 2025.
According to the Department of Finance Canada, the plan is structured in four phases to ensure an orderly transition for those affected by the fuel charge, including specific accommodations for certain industries.
In the first phase, almost all charging provisions are to be retroactively repealed effective April 1, 2025, formalizing in legislation the change made by previous regulations. The only exception will be a rule for some railways, which need extra time to verify and settle fuel charge obligations from before April 1, 2025. This rule is set to remain until October 1, 2025.
The second phase, effective October 1, 2025, would repeal all rebate provisions. During the period between April 1 and October 1, some rebates may still apply, such as for fuel charges on exported fuels. Rebates for fuel charge payments made in error or for corrections in accounting will remain available until the final repeal stage.
By the third phase, starting November 1, 2025, all registration requirements associated with the fuel charge would be repealed. Registrants will have until October 31, 2025, to claim rebates linked to periods before October 1, 2025.
The final phase, scheduled for April 1, 2035, involves repealing all remaining provisions of Part 1 of the legislation, including definitions, administrative rules, and procedural details. The Canada Revenue Agency will maintain authority to make reassessments and process amended returns for fuel charge obligations that arose before April 1, 2025, within normal limitation periods as described in the Act.
The Department of Finance Canada stated that these steps are intended to wind down the federal consumer carbon pricing system in a structured manner.