Government of Canada returning $872.4 million in 2024-25 fuel charge proceeds to Indigenous governments and small- and medium-sized businesses

Since 2019, it is no longer free to pollute anywhere in Canada and provincial and territorial governments have been able to design and implement their own carbon pollution pricing systems to meet a standard, federal benchmark. In provinces that have decided not to implement a system that meets the benchmark—specifically Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador—the federal system applies. All proceeds are returned in their province of origin—either through the Canada Carbon Rebate directly to Canadians, or through programs to Indigenous governments and small- and medium-sized businesses.

The Greenhouse Gas Pollution Pricing Act requires the federal government to return 100 per cent of net fuel charge proceeds in the province of origin. The majority of proceeds are returned directly to Canadians through the quarterly Canada Carbon Rebate, which gives eight out of 10 families more money back than they pay, with lower-income families benefitting the most. In 2024-25, the Canada Carbon Rebate will provide a family of four with up to $2,160 in affordability support.

The government is committed to returning remaining proceeds to Indigenous governments and small- and medium- sized businesses in provinces where the federal fuel charge applies.

In recognition of the impacts of climate change on Indigenous communities, the government is also announcing that starting in 2024-25, the share of fuel charge proceeds returned to Indigenous governments will increase from 1 per cent to 2 per cent. The government intends to return 2 per cent of fuel charge proceeds to Indigenous governments in subsequent years.

Returning fuel charge proceeds to Indigenous governments

Today, February 16, 2024, the Minister of Finance specifies the Minister of Environment and Climate Change as responsible for returning pollution pricing fuel charge proceeds to Indigenous governments. The Minister of Finance also specifies the period of 2024-25 as the period in respect of which the fuel charge proceeds specified amounts may be disbursed, in keeping with her authority under the Budget Implementation Act, 2019, No. 1. This specification contributes to fulfilling the government's commitment to return proceeds to impacted Indigenous Peoples.

In 2024-25, this amounts to $249.3 million that will be returned to Indigenous governments—including First Nations, Inuit, and Métis governments.

The table below sets out the specified amounts available to be returned to Indigenous governments, in each specified province where the federal fuel charge applies, through programming to be announced by Environment and Climate Change Canada (ECCC).

Returning fuel charge proceeds to small- and medium-sized businesses

Today, February 16, 2024, the Minister of Finance specifies the Minister of Environment and Climate Change as responsible for returning pollution pricing fuel charge proceeds to support small- and medium-sized enterprises in emission-intensive, trade-exposed sectors. The Minister of Finance also specifies the period of 2024-25 as the period in respect of which the fuel charge proceeds specified amounts may be disbursed, in keeping with her authority under the Budget Implementation Act, 2019, No. 1.

In 2024-25, this amounts to $623.1 million that will be returned to small- and medium-sized businesses.

The table below sets out the specified amounts available to be returned to small- and medium-sized businesses in specified provinces where the federal fuel charge applies.