GOVERNMENT POLICY UPDATE

This latest feature of the newsletter will be published monthly. The update serves as a recap and reference point for our members regarding the latest policy impacts on the energy market. We will continue to monitor and communicate any policy changes directly to members as they happen. The updates below are for the period beginning March 1 and ending March 31, 2021.

WHAT'S NEW? FEDERALLY

The Supreme Court of Canada rules carbon tax is constitutional

• The Supreme Court of Canada has ruled in favour of the federal government’s carbon pricing regime due to the “serious threat climate change poses to the world.” • Alberta, Ontario, and Saskatchewan have been opposed to the carbon tax, arguing that natural resources are provincial jurisdiction. • Environment Minister Jonathan Wilkinson issued an immediate statement lauding the decision as “a win for the millions of Canadians who believe we must build a prosperous economy that fights climate change.”

Clean Fuel Standard Regulation: comment period now closed

• Comments in response to the government’s updated

Clean Fuel Standard Regulation published on

December 19, 2020, in the Canada Gazette, Part I were due to Environment and Climate Change

Canada (ECCC) Thursday, March 4, 2021. • This marks the end of the 75-day consultation period.

ECCC is targeting late 2021 to publish final regulations.

Canada’s carbon price is set to increase April 1, 2021

• Part of the federal government’s broader plan to raise the price by $10 per tonne each year, capped at $50 per tonne in 2022, the next increase is set for April 1. • The current price of $30 per tonne of industrial greenhouse gas emissions will be raised to $40 per tonne, which translates to an extra 8.8 cents per litre of gasoline for regular consumers, according to the Canada Revenue Agency.

• The Honourable Seamus O’Regan Jr., Canada’s

Minister of Natural Resources, and the Honourable

Minister Peter Altmaier, Germany’s Minister of

Economic Affairs and Energy, entered into an energy partnership. • The agreement positions Canada as a clean energy partner with Germany for hydrogen, critical minerals, and liquefied natural gas.

Federal government announces funding to raise awareness of hydrogen fuel cell vehicles

• The Honourable Seamus O'Regan Jr., Canada’s

Minister of Natural Resources, announced $46,000 in funding to the Canadian Hydrogen and Fuel Cell

Association (CHFCA) to promote the benefits of hydrogen fuel cell electric vehicles (FCEV). • The initiative aims to increase hydrogen fuel cell technology knowledge across the municipal sector to lower emissions across the transportation sector. The goal is to accelerate FCEVs’ adoption by government and private-sector fleets. • Funding for this initiative comes from Natural

Resources Canada’s Zero-Emission Vehicle Awareness

Initiative, supporting the government’s goal of 100 percent zero-emission passenger vehicle sales by 2040.

WHAT'S NEW? REGIONALLY

TERRITORIES

Nunavut increases its fuel debt to keep gas prices low

• Bill 68, an Act to Amend the Revolving Funds Act,

No. 2, passed third reading in the Legislative

Assembly. The amendment will allow Nunavut’s

Petroleum Products Division to carry up to $20 million in debt from fuel purchasing, helping to keep fuel prices low in the territory.

WESTERN REGION

New electric vehicle chargers in Vancouver

• Canada’s Minister of Natural Resources, the

Honourable Seamus O’Regan Jr., announced a more than $119,000 investment to install 34 Level 2 electric vehicle (EV) chargers at six sites in Metro

Vancouver, British Columbia.

Regina to invest in biofuel processing plant

• The City of Regina has approved a request by True

North Renewable Fuels Ltd. (TNRF) for a $1-million grant to construct a new biofuel processing plant near the city. • This is the second grant True North has secured; the first was $1 million from Canada's Agricultural

Clean Technology (ACT) program. • The plant will focus on turning locally grown canola into biodiesel to be used in the aviation and rail industries.

Federal Government invest in EV chargers in Manitoba

• Canada’s Minister of Natural Resources, the

Honourable Seamus O’Regan Jr., announced a $155,000 investment to Eco-West Canada to install 31 Level 2 electric vehicle (EV) chargers in Winnipeg and several rural municipalities in southern Manitoba.

ONTARIO AND QUEBEC REGION

Ontario Budget 2021

• The provincial budget was tabled Wednesday, outlining its plan to spend $186.1 billion with a focus on pandemic management and recovery. • The budget tackles two pillars: Protecting People’s

Health, including health care, long-term care, and

COVID-19, and Protecting Our Economy with support for families, workers, and employers. The budget includes $1 billion for a province-wide vaccination plan and an additional $2.3 billion for testing and contact tracing.

• Included in the budget is a commitment to invest $56.4 million to create the Ontario Vehicle

Innovation Network (OVIN) over the next four years. This investment will build on the Autonomous

Vehicle Innovation Network (AVIN) to accelerate the development of next-generation electric, connected, and autonomous vehicle and mobility technologies. • The OVIN will boost the province’s role in manufacturing electric vehicles through partnerships between small and medium-sized enterprises (SMEs), academia, the auto industry, and the battery sector, including critical minerals development in Ontario’s North.

Quebec 2021 Budget

• The provincial budget was tabled with a $12.3-billion deficit that is expected to take six years to balance and a commitment that there will be no tax increases or other deficit-reduction measures until

Quebec reaches pre-pandemic employment levels.

Budget commitments related to the environment and climate change

• $2.1 billion in the budget is committed for the implementation of an environmental framework policy, including public transit, the electrification of transportation, and the decarbonization of the industrial sector. • The budget also includes $472.7 million to implement additional environmental protection measures.

Canada invests in wind energy to reduce diesel in northern Quebec

• To reduce reliance on diesel in rural and remote communities, the federal government announced a $7.1-million investment for TUGLIQ Energy Co. to help fund the third phase of its wind energy project that will displace diesel generation in northern

Quebec.

Canada and Quebec invest in electric vehicle battery assembly

• Prime Minister Justin Trudeau and Quebec Premier

François Legault announced an equal investment totaling nearly $100 million to Lion Electric to establish a highly automated battery-pack assembly plant. • Lion Electric will be the first Canadian manufacturer of medium and heavy-duty vehicles to have state-of-theart, automated battery-pack manufacturing facilities.

ATLANTIC REGION

New Brunswick Fuel Retail Margin Review

• The New Brunswick Energy Utilities Board (NBEUB) held its scheduled three-day hearing on Matter 485:

Retail Petroleum Margin this week. Gardiner Pinfold was once again retained to review the maximum retail margins, delivery costs, and full-service costs and to provide a report on its findings. This current review is based on data from 2017 to 2019; the timing precludes using 2020 numbers. • In an amended recommendation, Gardiner has proposed a 7.8% increase to the current margin of 6.8 Cpl, which amounts to a .53 Cpl increase.

Summary of proceedings: Much of the hearing focused on the integrity of the sample, noting a low response rate, which has been a challenge in years past. Of the nearly 410 sites active in New Brunswick during the review time period, Gardner’s report reflects useable data from only 93 retailers, of which 20 are considered independents. There was also broad recognition that the margin review process set forth in the 2006 regulation might require legislative review. The NBEUB has made efforts to simplify data collection in the hopes of yielding a greater response rate following CIPMA and ACSA’s intervention in the last review process, which resulted in greater consultation from board staff with associations on the development of a condensed list of expenses. In this week’s hearing, CIPMA acknowledged these efforts and offered further support to board staff to identify strategies to increase awareness and participation in the process in advance of the next review. The Board is expected to deliberate and share its findings at a later date. All files on the matter are available publicly here.

Nova Scotia 2021 Budget

• The provincial budget was tabled Thursday, outlining its plan to spend $12.4 billion and return to balance in four years with investments in key sectors such as long-term care, public health, mental health, and the environment.

Budget commitments related to the environment and climate change

• $16.4 million for green infrastructure projects to help reduce GHG emissions while ensuring citizens are protected from higher fuel and electricity costs. • $7.6 million for active transportation and public transit.