TEI Files Comments on Canada's Proposed Greenhouse Gas Pollution Pricing Act and Draft Fuel Charge Regulation.

• Position: Tax Executives Institute

On February 28, 2018, TEI filed comments on the proposed Greenhouse Gas Pollution Pricing Act and Draft Fuel Charge Regulation released by the Department of Finance and Ministry of Environment and Climate Change on January 15, 2018. TEl's comments were prepared under the aegis of TEl's Canadian Commodity Tax Committee, whose chair is David Card. Committee members Calvin Chiew, Kevin Thorn, Mike Polanchek, and Chantal Groulx contributed to the development of TEl's comments. Pilar Mata, tax counsel for TEI, coordinated the preparation of TEl's comments.

On behalf of Tax Executives Institute (TEI), we write to provide our comments on the proposed Greenhouse Gas Pollution Pricing Act (Act) and Draft Fuel Charge Regulation (Regulations) (collectively, Proposed Legislation) released by the Department of Finance (Finance) and Ministry of Environment and Climate Change (Environment) on January 15, 2018. TEI appreciates the opportunity to provide feedback as part of the Government of Canada's (Government) continuous engagement with industry and other stakeholders regarding the design of this important piece of federal legislation. TEI notes the design and implementation of the Proposed Legislation raises significant challenges requiring input and collaboration from many government agencies and stakeholders to ensure Canadians are provided a fair and consistent national carbon policy across the country.

About Tax Executives Institute

TEI was founded in 1944 to serve the professional needs of in-house tax professionals. Today, the organization has 56 chapters in North and South America, Europe, and Asia, including four chapters in Canada. Our approximately 7,000 members represent 2,800 of the largest companies in the world, many of which either are resident or do business in Canada.

As the preeminent association of business tax professionals worldwide, TEI has a significant interest in encouraging the uniform and equitable enforcement of tax laws, and reducing the cost and burden of tax administration and compliance to the benefit of taxpayers and government. TEI is committed to maintaining a system that works--one that builds upon the principle of voluntary compliance, is consistent with sound tax policy, is easy to administer, and is efficient.

Comments on the Proposed Legislation

The Pan-Canadian Framework on Clean Growth and Climate Change (Framework) is Canada's plan to grow the economy while reducing greenhouse gas emissions and building resilience to adapt to a changing climate. In October 2016, the Canadian government published a federal carbon pricing benchmark (Federal Benchmark) mandating the application of carbon pricing to a broad set of emission sources throughout Canada by 2018. The Federal Benchmark provided provinces and territories flexibility to implement their own carbon pollution pricing systems and committed to implement a federal carbon pricing backstop (Federal Backstop) that would be imposed upon any province or territory that did not have a qualifying carbon pricing system in place by 2018. The Proposed Legislation sets forth the proposed Federal Backstop (Proposed Federal Backstop).

It is our understanding that the Proposed Legislation will apply in provinces and territories that do not have a carbon pricing system or do not have a carbon pricing system that aligns with the Federal Benchmark. The Proposed Federal Backstop is comprised of two key elements - a federal carbon levy (FCL) applied to fossil fuels and an output-based pricing system for industrial facilities emitting above a certain threshold, with an opt-in capability for smaller facilities with emissions below the threshold.

TEl's comments are...