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What is carbon tax and how does it work?


The Canadian federal government implemented a carbon tax in provinces of Ontario, Manitoba, Saskatchewan and New Brunswick as they didn’t already have their own carbon tax in place. Carbon tax encourages consumers to emit less CO2 to hopefully reduce greenhouse gases. Carbon taxes affects all of us, therefore, let’s take a look at how carbon tax works and a few ways you could save money.

How does it work?

In simple terms, carbon tax is a price that is placed on each tonne of carbon emissions that is produced from carbon sources. Carbo tax does not affect regular users yet, it only charges big fuel companies who are responsible for emitting higher percentage of carbon in the air.

How much does the average person have to pay for carbon tax and what can you do to reduce your carbon footprint?

The cost of carbon price is about 4.0 cents per litre of gasoline or about $20/tonne and this averages to about $400/year. However, the Canadian government provides rebates to the consumers from the revenue it will produce. Keeping all this aside, what are some things you can do to help the environment and reduce your carbon footprint.

  • Cars are the number one cause of greenhouse emissions. Therefore, instead of driving everyday maybe try taking public transportation or carpooling. If you are driving, consider driving fuel efficient cars or electric vehicles.
  • If you are looking to switch or buy a new vehicle, consider buying an electric vehicle or hybrid.
  • At home, consider installing a smart thermostat at your home. This will ensure smart heating or cooling on when needed. This will lower your heating bills in the winter months.
  • When doing laundry, consider using cold water instead of hot. Also, consider drying your clothes outside during the summer months.

It’s always beneficial to upgrade your house to be more fuel efficient. You can contact any of our licensed brokers to upgrade your policy to a more discounted price.

Read More: How to Get a Motorcycle License in Ontario: A Step-by-Step Guide

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