New Brunswick’s previous carbon tax plan:
The made-in-New-Brunswick carbon tax plan should remain in place until July 1, 2023. This plan uses carbon tax revenues to lower provincial gasoline taxes, personal income taxes and invest in climate adaptation projects such as preventing soil erosion. New Brunswick’s plan also exempts furnace oil from the carbon price. In 2022, the plan resulted in:
- + $206,000,000 – carbon tax revenues ($50t/CO2e) from April 1, 2022 to March 31, 2023
- – $36,000,000 – Climate Change Fund
- – $81,000,000 – continued the Gasoline and Motive Fuels Tax reduction by 4.4 cents
- – $14,000,000 – Natural Gas Distribution Program
- – $75,000,000 – lowering the first personal income tax bracket, raising the basic personal amount and increasing the Low-Income Tax Reduction threshold.
New federal plan (effective July 1st, 2023):
Now, New Brunswick has agreed to the federal backstop plan, which returns 90% of revenues collected to residents through Climate Action Incentive payments. The remaining 10% will be returned to small businesses and Indigenous groups.
What does this mean for residents?
The Climate Action Incentive payments will be sent to all residents quarterly as a rebate cheque. For example, a family of four in Nova Scotia would receive about $248 every three months. The amount for New Brunswick residents has not yet been calculated. Rural residents will receive an additional 10%. To be eligible for the Climate Action Incentive payment, residents must complete an annual tax return.
Heating oil and natural gas users will no longer be exempt from paying carbon taxes with the previous plan.
What does this mean for businesses?
There are minimal supports available for businesses under the federal carbon pricing backstop plan. Businesses should consider the implications of increased taxes on their operations.
Fishers and farmers will continue being exempt from paying the federal fuel charge on gasoline and light fuel oil (e.g., diesel) used for eligible fishing and farming activities.
New Brunswick’s Output-Based Pricing System will also remain in place.
The federal carbon pollution pricing benchmark: https://www.canada.ca/en/environment-climate-change/services/climate-change/pricing-pollution-how-it-will-work/federal-carbon-pollution-pricing-benchmark.html.