Thank you, Mr. Chair.

Thank you, committee members.

I'll say a few words regarding the proposal in Bill C-86 on the climate action incentive payment. My colleague Pierre Mercille will then say a few words about the proposal with respect to GST on emission allowances.

Bill C-86 proposes to amend the Income Tax Act to introduce a climate action incentive. This measure creates a mechanism by which direct proceeds collected under the fuel charge component of pollution pricing under the Greenhouse Gas Pollution Pricing Act can be returned to individuals in provinces and territories subject to the federal pollution pricing system if those proceeds are not returned directly to the government of that jurisdiction.

The climate action incentive payments enabled by this measure will be received by individuals when they file their tax returns for the 2018 taxation year—that is, when they file their tax returns in early 2019.

Calculation of the amount of the climate action incentive payment for an eligible individual will be based on the individual's province of residence and family circumstances, with province-specific amounts to be specified annually by the Minister of Finance. Individuals living in rural areas, defined as areas outside census metropolitan areas as established by Statistics Canada, will receive a supplementary rebate equal to 10% of their baseline entitlement.

Distributions made through this mechanism will be deemed to have been paid as rebates in respect of fuel charges levied under part 1 of the Greenhouse Gas Pollution Pricing Act. This measure can be found in clauses 13, 18(1), 18(8), 18(9) and 19 in part 1 of Bill C-86.

Thank you.

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