Federal government releases further details on carbon tax rebate

The federal government is giving itself some room to give carbon tax rebate cheques directly to people in those provinces that refuse to impose a carbon tax of their own.

A draft proposal spells out that any federal revenues raised by a carbon tax can either be returned to the government in the province where the money was raised, given directly to individuals, or divided between the two.

Only provinces that voluntarily ask to use the federal carbon price system will guarantee they get the revenues to use how they see fit.

Provinces that end up having the federal system imposed on them because they don't meet federal requirements will run the risk of being bypassed in favour of Ottawa sending rebate cheques directly to individuals.

In an interview with The Canadian Press yesterday, Prime Minister Justin Trudeau said no final decision has been made on exactly how Ottawa will handle the revenues but expressed a preference for rebates to people.

Provinces have to submit their plans by September for Ottawa to review and decide if they meet the federal requirements.

If they don't, Ottawa will impose the federal backstop entirely or in part to bring the system up to snuff.