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Government Investigations in Singapore 2025
We have contributed the Singapore chapter of Getting the Deal Through, Government Investigations 2025.
Canada | Publication | December 15, 2020
The Canadian federal government recently announced that the carbon tax will increase from its current $30 per tonne of greenhouse gas (GHG) emissions to $170 per tonne in 2030 – an increase of 467% over 10 years. This announcement, if made into law, is expected to have a profound effect on many consumers, businesses and industries in Canada.
The federal carbon tax in Canada is set under the federal Greenhouse Gas Pollution Pricing Act (GGPPA). The GGPPA has two main parts:
For the 2020 compliance year, the carbon tax is set at $30 per tonne of CO2-equivalent. The carbon tax is currently scheduled to increase by $10 annually until it hits $50 per tonne in 2023. The recent announcement, if implemented into law, will increase the carbon tax by $15 per tonne per year starting in 2023 until the tax hits $170 per tonne in 2030.
The GGPPA is a “back stop,” meaning it only applies if a province or territory does not have its own carbon pricing scheme or industrial emissions regulations that meet federal benchmarks. The GGPPA allows the federal government to decide if a province’s carbon pricing scheme and industrial emissions regulations are equivalent to the federal carbon tax in the GGPPA. If a provincial carbon pricing scheme for fuels is deemed equivalent, then the federal carbon tax on fuels does not apply in that province. Similarly, if provincial industrial emissions regulations are deemed equivalent, then the federal OBPS will not apply. Provinces and territories without a carbon pricing scheme for fuels or industrial emissions deemed equivalent are subject to the federal carbon tax on fuels and the OBPS.
The announced increases in the federal carbon tax will require the provinces with carbon taxes on fuels to match the federal increases in 2023 to 2030 or else their carbon taxes may no longer be deemed to be equivalent and the federal tax will apply on fuels produced and distributed in their provinces. Similarly, if a province does not match the federal tax in its emissions regulations, the OBPS may apply.
The federal government has said it will review each province’s carbon scheme annually to ensure compliance with the GGPPA.
Both emission and offset credits can be used under the GGPPA for compliance purposes. The market prices of emission and offset credits usually track the cost of the tax. The large increases in the federal carbon tax can therefore be expected to result in similarly large increases in the market prices of carbon and offset credits. That may increase the development of renewable energy and emission reduction projects as developers may receive greater revenues from the sale of credits and offsets from their projects. For instance, in Alberta, the value of the offset credits in 2030 to a renewable energy company may be greater than the price they currently receive for the electricity they generate from their operations.
Alberta, Ontario and Saskatchewan brought court cases challenging the constitutionality of the GGPPA. The appellate courts in Ontario and Saskatchewan ruled the GGPPA was constitutional under the “peace, order and good governance” power of the federal government. The Alberta Court of Appeal, on the other hand, found the GGPPA was not within the federal government’s constitutional power. All three provincial court challenges have been appealed to the Supreme Court of Canada and were heard together in September 2020. The Supreme Court of Canada has not yet issued a ruling.
The recently announced 467% increase in the carbon tax under the GGPPA may trigger further constitutional challenges by some of the provinces.
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We have contributed the Singapore chapter of Getting the Deal Through, Government Investigations 2025.
Publication
The private credit market and direct lending have grown and diversified immensely in the past decade, offering alternative sources and terms of debt compared to those historically provided by the syndicated leveraged loan and public issuance markets. Consequently, they are fast becoming pivotal components in the capital ecosystem, so much so that the Bank of England consider that the private credit market is currently responsible for approximately $1.8 trillion of debt issuance, which is four times its size in 2015. This growth has been particularly pronounced in Europe and the US but there has also been significant activity in Asia.
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The EU’s Artificial Intelligence Regulation, commonly referred to as the AI Act, is expected to come into force during the summer of 2024 (the AI Act). The AI Act will be the first comprehensive legal framework for the use and development of artificial intelligence (AI), and is intended to ensure that AI systems developed and used in the EU are safe, transparent, traceable, non-discriminatory and environmentally friendly.
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