This prediction market topic concerns the potential repeal of Canada's federal carbon pricing system, commonly referred to as the carbon tax, before January 1, 2027. The market resolves to 'Yes' if the Greenhouse Gas Pollution Pricing Act, the legislation underpinning the federal carbon levy and output-based pricing system, is formally repealed or rendered inoperative by Parliament prior to that date. The policy represents a cornerstone of Canada's climate strategy, applying a price on carbon emissions that increases annually, with the current system consisting of a fuel charge on consumers and a separate system for large industrial emitters. The topic has become a central and highly polarized issue in Canadian politics, pitting climate policy against economic affordability concerns. Interest stems from the policy's direct impact on household energy costs, its role in meeting international climate commitments, and its status as a defining political battle between the governing Liberals and the opposition Conservatives, who have vowed to eliminate it. Recent provincial challenges, political pressure, and debates over its effectiveness in reducing emissions while managing cost-of-living pressures have intensified scrutiny on its future.

Historical Context

The political journey toward a national carbon price in Canada began in earnest with the Paris Agreement in 2015, which Canada ratified in 2016. The Pan-Canadian Framework on Clean Growth and Climate Change, agreed to by First Ministers in 2016, established the principle that all jurisdictions would have carbon pricing in place by 2018. This led to the introduction of the Greenhouse Gas Pollution Pricing Act in Part 5 of the Budget Implementation Act, 2018, No. 1, which received Royal Assent on June 21, 2018. The federal 'backstop' system was designed to apply in provinces that either refused to implement their own pricing system or whose systems did not meet federal minimum stringency standards. The policy immediately faced legal challenges from several provinces, most notably Saskatchewan, Ontario, and Alberta, culminating in the 2021 Supreme Court reference case. Historically, carbon pricing has been a contentious issue in Canadian federal elections, with the 2008 election featuring a proposed carbon tax by Stéphane Dion's Liberals that was widely seen as contributing to their defeat. The current policy's structure, with increasing annual prices legislated out to 2030, was designed to provide market certainty but has also created a fixed timeline for political confrontation.

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