Output-Based Pricing System

The federal OBPS is designed to ensure there is a price incentive for industrial emitters to reduce their greenhouse gas emissions and spur innovation while maintaining competitiveness and protecting against “carbon leakage” (i.e. the risk of industrial facilities moving from one region to another to avoid paying a price on carbon pollution).

On this site, you will find information about the OBPS.

Important notice

The deadline for submitting annual reports and verification reports under the OBPS for the 2023 compliance period is Saturday June 1st, 2024. Annual reports and verification reports must be submitted on or before Saturday June 1st, 2024. Visit the Quantification, Reporting and Verification tab for more information.

The deadline for submitting applications for voluntary participation for the 2025 compliance period is July 15th, 2024.

Legislation and Regulations

The Output-Based Pricing System Regulations (OBPS Regulations), established under Part 2 of the Greenhouse Gas Pollution Pricing Act (GGPPA), were published in the Canada Gazette, Part II, on July 10, 2019, following the publication of a Notice of Intent in December, 20, 2018. The OBPS Regulations apply in jurisdictions listed on Part 2 of Schedule 1 to the GGPPA (backstop jurisdictions), as shown on the Carbon pollution pricing systems across Canada web page.

Recent amendments

On November 22, 2023, the Regulations Amending the Output-Based Pricing System Regulations and the Environmental Violations Administrative Monetary Penalties Regulations were published in the Canada Gazette , Part II. These amendments ensure continued greenhouse gas (GHG) emissions reductions, reduce the administrative burden, and improve the implementation of the OBPS Regulations. Certain amendments are effective retroactively to January 1, 2023, as enabled by section 194 of the GGPPA and the Notice of Intent published on October 28, 2022, while others come into force on the day on which they are registered or on January 1, 2024. The Quantification Methods for the Output-Based Pricing System Regulations is a technical document incorporated by reference that contains the detailed emissions quantification methods previously included in Schedule 3 to the OBPS Regulations and was published on December 12, 2023.

Amendments to the Output-Based Pricing System Regulations

On September 1, 2021, the Regulations Amending the Output-Based Pricing System Regulations were published in the Canada Gazette, Part II. These amendments improve clarity and implementation of the OBPS Regulations and prepare the federal OBPS for transitions to provincial carbon pollution pricing systems. Certain amendments are effective retroactively to January 1, 2021, as enabled by section 194 of the GGPPA and the Notice of Intent published on December 23, 2020, while others came into force on January 1, 2022.

Amendments to Schedules to the Greenhouse Gas Pollution Pricing Act

On July 5, 2023, the Order Amending Part 2 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act was published in the Canada Gazette, Part II. This Order removes the province of Saskatchewan from Part 2 of Schedule 1 to the GGPPA retroactively to January 2023, as enabled by section 194 of the GGPPA and the Notice of Intent that was published on December 23, 2022.

On October 26, 2022, the Order Amending Schedule 3 to the Greenhouse Gas Pollution Pricing Act (Order Amending Schedule 3) and the Order Amending Schedule 4 to the Greenhouse Gas Pollution Pricing Act (Order Amending Schedule 4) were published in the Canada Gazette, Part II. The Order Amending Schedule 3 updates the global warming potential values for greenhouse gases listed on Schedule 3 to the GGPPA as of January 1, 2023, in accordance with the Intergovernmental Panel on Climate Change’s Fifth Assessment Report. The Order Amending Schedule 4 updates the excess emissions charge for calendar years 2023 to 2030. The excess emissions charge increases to $65 per tonne of CO2e in 2023 and will increase by $15 per calendar year until 2030, resulting in an excess emissions charge of $170 per tonne of CO2e in 2030.

On September 1, 2021, the Order Amending Part 2 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act (the Order) was published in the Canada Gazette, Part II. This Order removes New Brunswick from Part 2 of Schedule 1 to the GGPPA retroactively to January 1, 2021, as enabled by section 194 of the GGPPA and the Notice of Intent published on December 23, 2020, and of Ontario as of January 1, 2022.

Return of OBPS Proceeds

Proceeds from the OBPS in backstop jurisdictions will be returned to the jurisdiction of origin to support industrial projects to cut emissions and use new cleaner technologies and processes.

For general information about the return of carbon pollution pricing proceeds visit Carbon Pollution Pricing Proceeds Programming.

Fuel charge

The fuel charge component of the federal carbon pollution pricing system is administered by the Canada Revenue Agency.

Historic Documents

Mandatory participation

Under subsection 171(1) of the Greenhouse Gas Pollution Pricing Act (GGPPA), a person responsible for a covered facility must apply for registration of that facility in the Output-Based Pricing System (OBPS). A facility that is in a backstop jurisdiction and meets the criteria set out in section 8 of the Output-Based Pricing System Regulations (OBPS Regulations) is a covered facility. Persons responsible for facilities that meet the criteria in section 8 of the OBPS Regulations must apply to register those facilities in the OBPS within 30 days of the facility meeting those criteria.

When there is more than one person responsible for a facility, the requirements of the GGPPA and its regulations apply to each person responsible. However, compliance by any one of the responsible persons will satisfy the obligations. As such, one person responsible must apply for registration on behalf of the others. Before applying to register, persons responsible must decide amongst themselves who will submit the application on behalf of all of them.

Voluntary participation

Under subsection 172(1) of the GGPPA, persons responsible for facilities located in a backstop jurisdiction that do not meet the criteria outlined in section 8 of the OBPS Regulations may request that the facility be designated as a covered facility.

The updated Policy Regarding Voluntary Participation in the Output-Based Pricing System (effective January 1, 2024) outlines the considerations the Minister will take into account when making such a designation, and has more information on applying for voluntary participation.

As of January 1, 2024, the considerations the Minister will take into account include whether the facility is engaged in any of the additional industrial activities on the new List of Recognized Additional Industrial Activities under the Output-Based Pricing System. An additional industrial activity is an industrial activity that is not set out in column 1 of Schedule 1 to the OBPS Regulations that is recognized by the Minister as being from a sector at significant risk of competitiveness impacts and carbon leakage resulting from carbon pricing.

A new Policy for recognizing additional industrial activities from sectors at significant risk of carbon leakage and competitiveness impacts outlines the considerations the Minister will take into account when deciding whether to recognize activities as additional industrial activities.

IMPORTANT DATES

As of January 1, 2024, applications under section. 172 of GGPPA for voluntary participation in the OBPS for facilities carrying out an activity on the List are due each year by July 15 for participation starting January 1 of the following calendar year. For more information refer to the updated Policy regarding voluntary participation in the Output-Based Pricing System.

Requests from existing covered facilities to have an industrial activity recognized by the Minister as an additional industrial activity must be submitted by February 15 of each calendar year.

Requests from facilities applying for designation as a covered facility that also include a request to have an additional industrial activity recognized by the Minister must be made by February 15. For more information, refer to the new Policy for recognizing additional industrial activities from sectors at significant risk of carbon leakage and competitiveness impacts.

How to apply to register

Persons applying to register must use the Registration and notice of change module in ECCC’s Single Window System. This is an online system that many facilities already use to submit reports required under other federal and provincial legislation. Persons who have already reported facility emissions to the Greenhouse Gas Reporting Program (GHGRP) will already have access.

For more information on submitting an application for registration, see Steps to submitting your OBPS application for registration or notice of change (PDF). (Note: the document is being updated and may not reflect the most recent amendments to the OBPS Regulations.)

Notifying of changes to registration information

Section 48 of the OBPS Regulations requires the person responsible for the covered facility to notify the Minister in writing, within 30 days after a change to any of the information submitted in an application to register a facility or an application for designation, including changes in the facility’s perimeter.

Starting with the 2024 compliance period, all covered facilities engaged in activities on The List of Recognized Additional Industrial Activities under the Output-Based Pricing System (the List) must include these activities in the determination of their emissions limit. The person responsible for a covered facility under the OBPS that is engaged in one or more of these activities must submit a Notice of Change to add these activities to the registration information for the facility.

Starting in 2024, the List will be updated annually. Newly recognized additional industrial will be published each spring. Persons responsible for covered facilities should review the List annually and submit a Notice of Change if they undertake a newly recognized activity. Additional industrial activities must be taken into account in the calculation of the emissions limit starting in the compliance period that follows the calendar year in which the additional industrial activity is recognized.

For more information on how to notify the Minister in this case, see Steps to submitting your OBPS application for registration or notice of change (PDF). (Note: the document is being updated and may not reflect the most recent amendments to the OBPS Regulations.)

Ceasing to be a covered facility

Section 7 of the OBPS Regulations provides that a facility ceases to be a covered facility when it has ceased production for all specified industrial activities for five consecutive compliance periods or the person responsible for the covered facility makes a request to that effect because it is expected that the specified industrial activities engaged in at the covered facility will cease for at least 12 consecutive months.

A person responsible for a facility that has been designated as a covered facility under subsection 172(1) of the GGPPA may apply to have the designation of the facility cancelled. If the Minister approves the request to cancel the designation, that cancellation takes effect on December 31 of the calendar year in which the decision is made, at which point the facility ceases to be a covered facility.

Section 6 of the OBPS Regulations provides that the Minister may cancel the designation and registration of a covered facility if it was expected to emit at least 10 kt of CO2e in any of the three calendar years following the date of first production, but fails to meet this by December 31 of the third calendar year following that date.

Submitting a request

To make any of these requests, the person responsible for the covered facility must submit a notice of change through the Registration and notice of change module in ECCC’s Single Window System. For further information on how to submit a notice of change, see Steps to submitting your OBPS application for registration or notice of change (PDF). (Note: the document is being updated and may not reflect the most recent amendments to the OBPS Regulations.)

Quantification, Reporting and Verification

General

Section 173 of the Greenhouse Gas Pollution Pricing Act requires that, for each compliance period, a person that is responsible for a covered facility must, in accordance with the Output-Based Pricing System Regulations (OBPS Regulations),

  1. submit to the Minister a report that sets out the information that is specified in the regulations with respect to the greenhouse gas emissions limit that applies to the covered facility and any other information that is specified in the regulations; and
  2. cause the report to be verified by a third party.

Reporting Deadline

The deadline for submitting an annual report and a verification report under the OBPS Regulations is June 1 of the calendar year following the compliance period.

Content

Each annual report and corrected report must include the information outlined in sections 11 and 12, and Schedule 2 of the OBPS Regulations. Associated verification reports must contain the information outlined in Schedule 5 of the OBPS Regulations.

How to submit an annual report and verification report

The annual report and verification report must be submitted through the OBPS Reporting module in ECCC's Single Window System.

To submit an annual report and verification reports, follow these steps:

Step 1: Ensure the information in your registration application is accurate and up to date

Ensure that information in your application to register in the OBPS is up to date by logging into the Registration and notice of change module in ECCC's Single Window System.

It is important the information in your application for registration be up to date and accurate as this information is used to manage access to, and configure, the OBPS Reporting module in ECCC's Single Window System, through which the annual report must be submitted. The Authorized Official named in the registration application is expected to sign the annual report.

See Steps to submitting your OBPS application to register and notice of change (PDF) for information on how to view your registration application and submit a notice of change should you need to update the information in your registration application. Note: the document is being updated and may not reflect the most recent amendments to the OBPS Regulations.

Step 2: Complete and submit your annual report and verification report

Click on ECCC and Partners Greenhouse Gas Reporting and ECCC Output-Based Pricing System (OBPS).

If you do not see this link, you do not have access. Refer to the instructional videos to learn how to gain access.

A welcome screen will give you the option to continue to GHG Reporting or to OBPS Registration and notice of change or to OBPS Reporting.

Click on OBPS Reporting.

On the OBPS Reporting Dashboard screen, search for the facility for which you want to create a report for by filtering on Responsible Person name and Compliance Period.

Select the + action in the dashboard for the correct facility.

Follow the instructions in the blue and grey information boxes throughout the system to complete all sections.

Notification of Errors or Omissions

Sections 176 and 177 of the Greenhouse Gas Pollution Pricing Act require that the person responsible for a covered facility notify, as soon as possible, the Minister in writing if within 5 years of submitting an annual report they become aware of an error or omission in the report. Submitting a Notice of Error is done through the OBPS Reporting module in ECCC's Single Window System.

Quantification

The information to be included in an annual report is set out in the OBPS Regulations. It includes the quantity of greehouse gas (GHG) emissions and production.

Quantification Methods

On November 22, 2023, as part of amendments to the OBPS Regulations, some quantification methods were removed from Schedule 3 to the OBPS Regulations. The Quantification Methods for the Output-Based Pricing System Regulations (Quantification Methods), a document incorporated by reference into the OBPS Regulations, specifies the methods to quantify GHGs, the ratio of heat and the quantity of electricity generated. It applies as of the 2024 compliance period.

Guidance on Quantification Requirements

Guidance on the quantification requirements of GHGs and production, including emissions limits and calculated output-based standards (OBS) is available for the: