In 2019, every province in Canada began taxing carbon pollution as a means to reduce greenhouse gas emissions. Every province and territory has designed its own carbon pricing system based on local needs, or has chosen to adopt the federal carbon pricing system in Canada. The federal government sets minimum national stringency standards that all systems must meet to ensure that they are comparable and contribute their fair share to reducing greenhouse gas emissions. If a province decides not to price pollution, or proposes a system that does not meet federal standards, the federal carbon pricing system is adopted accordingly. The federal government published strengthened standards surrounding carbon pricing in August 2021 for the 2023 to 2030 period.

Under the Greenhouse Act, as adopted on 21 June 2018, the federal pricing system is comprised of the following parts:

• A regulatory charge on fossil fuels like gasoline and natural gas, known as the fuel charge
• A performance-based system for industries, known as the Output-Based Pricing System

The fuel charge applies in the provinces of Ontario, Manitoba, Yukon, Alberta, Saskatchewan, Nunavut, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island. The Output-Based Pricing System applies in the provinces of Manitoba, Prince Edward Island, Yukon, Nunavut and partially in Saskatchewan. All other provinces and territories are implementing their own pricing systems.