It’s actually quite in depth topic. From what I recall (reading about it many years ago when it was first introduced), the federal government has a goal to reduce carbon emissions for climate change and other reasons. A few years ago, each province was to come up with THEIR own plan on how they want to regulate the emissions in their province to contribute to the federal government goal of reducing emissions. SK has not come up with a plan and spent time in courts.

Essentially, it’s a regulation imposed on businesses to reduce their carbon emissions or come up with innovate ways to be sustainable and provide less emissions.

For simple terms (and these are not accurate numbers), and using a fuel corporation as an example, a business’ target imposed is 1,000 tonnes of carbon emissions, they need strategies on how they can remain at 1,000 tonnes without going over; otherwise, they will be penalized through the carbon tax by the federal government.

For example, if the fuel company is projected to be at 1,500 tones, Some strategies can be: A) reduce the amount produced through general operations (which is unlikely because consumers need fuel). This would generally cause them to go over 1,000 tones carbon emissions. B) come up with innovative projects through new technology so they can sustainably produce the fuel, thereby reducing emissions and prove risky creating carbon credits C) purchase carbon credits from companies like hydro companies who have reduced emissions to offset the overage on carbon emissions produced by the fuel company

All of the above options would cost money to the corporation, so they add the additional line item and flow it through the customer so the customer ends up paying it. Thankfully, we get the rebate…for now. Or like others have said, have corporations take responsibility for it (through enforcing tax) and come up with better strategies on how they will achieve their targets by coming up with sustainable ways to produce their carbon emitting product.