Madam Speaker, carbon pricing is key to any credible climate plan, because it is a cost-effective way to significantly reduce pollution while driving clean innovation and creating new jobs. A price on carbon creates a powerful incentive to cut pollution. It encourages people and businesses to save money by making cleaner choices, such as better insulating their homes or upgrading to more efficient equipment. Carbon pricing is a foundation of Canada's clean growth and climate action plan.
Four out of five Canadians live in a jurisdiction that is already pricing pollution today. By ensuring that all parts of Canada price pollution to the same standard, we will help ensure that we drive down our emissions and grow our economy. The clearer, more consistent, strong, and predictable the price signal, the greater its effectiveness in driving the choices that contribute to the transition to a low-carbon economy.
There are three main carbon pricing systems in Canada: cap and trade, a carbon tax or other form of charge on fossil fuels, and a hybrid system. The federal carbon pollution pricing system will use a hybrid approach that consists of two components: a charge on fossil fuels that will generally be paid by fuel producers or distributors, and a performance-based system for industrial facilities. It will be considered to be a regulatory fuel charge, as it will be aimed at changing behaviours. Putting a price on carbon pollution will create an incentive for businesses and consumers to make lower-carbon choices.