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Canada · Emissions trading system

Federal Output-Based Pricing System (OBPS)

Canada's federal OBPS is the industrial carbon pricing system under the Greenhouse Gas Pollution Pricing Act, applying where provinces and territories do not run their own systems. The consumer fuel charge was set to zero on 1 April 2025 and was removed from federal legislation by Bill C-4 (Royal Assent 12 March 2026), leaving industrial pricing as the federal backstop.

In forcesince 2019Verified 4 Oct 2026

The OBPS prices emissions from large industrial facilities against output-based standards: facilities emitting at least 50,000 tCO2e a year are covered, and facilities emitting at least 10,000 tCO2e may opt in. As of 2025 the federal system applied in Manitoba, Prince Edward Island, Yukon and Nunavut; other jurisdictions run their own industrial systems under the federal benchmark.

Federal fuel charge rates were set to zero from 1 April 2025, and the requirement for provinces and territories to have a consumer-facing carbon price was removed. Bill C-4, which received Royal Assent on 12 March 2026, permanently removes the consumer fuel charge from federal legislation. On 19 May 2026 the government published a new headline price trajectory, effective 15 May 2026, for industrial carbon pricing — CAD 95 per tonne in 2026, CAD 100 in 2027, CAD 115 in 2030 and CAD 130 in 2035, rising to CAD 140 by 2040 — replacing the earlier schedule of CAD 15 annual increases to CAD 170 in 2030.

Legal journey

From proposal to operation

  1. Enacted

    Greenhouse Gas Pollution Pricing Act receives Royal Assent

    laws-lois.justice.gc.caOfficial
  2. In force

    Federal Output-Based Pricing System begins applying to large industrial emitters

    icapcarbonaction.com
  3. Milestone

    Output-Based Pricing System Regulations registered (SOR/2019-266)

    laws-lois.justice.gc.caOfficial
  4. Milestone

    Federal fuel charge set to zero; OBPS becomes the only federal backstop

    icapcarbonaction.com
  5. Milestone

    Bill C-4 receives Royal Assent, removing the consumer fuel charge from law

    canada.caOfficial
  6. Milestone

    New industrial carbon price path published: CAD 95 in 2026 to CAD 140 by 2040

    icapcarbonaction.com

Each milestone links to the page it was checked against. Dates are given only to the precision the source supports.

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