Canada: Proposal for border carbon adjustments, consultation phase

Finance is seeking feedback on environmental, economic and international engagement and trade considerations of potential border carbon adjustments.

Environmental, economic and international engagement and trade considerations

Stakeholders will have an opportunity to comment on potential border carbon adjustments in Canada. 

The first phase of consultations launched 5 August 2021, with the Department of Finance holding discussions with the provinces and territories, as well as certain industry associations and environmental organizations. Finance is seeking feedback on environmental, economic and international engagement and trade considerations of potential border carbon adjustments—which could take the form of import charges or export rebates.

Finance said that these initial consultations will help identify questions to be further examined in a broader public consultation that will be announced later this year. Finance also stated that it intends to continue to advance discussions with key international trading partners throughout the process to provide coordination among different policies and approaches.

Finance released a paper that outlines foundational information and key considerations of border carbon adjustments to provide context and to inform discussions. Specifically, Finance outlined the environmental, economic and international trade considerations, as well as several issues around the design and administration of these adjustments.

Canada's plan to explore border carbon adjustments is part of a larger global trend. For instance, the European Commission released a legislative proposal for a carbon border adjustment mechanism as part of a package of reforms, known as the "EU Green Deal" in July 2021.

Read an August 2021 report prepared by the KPMG member firm in Canada


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