Alberta set to pass law to kill provincial carbon tax, as federal tax looms

EDMONTON — Alberta’s consumer carbon tax is dead, setting the stage for a showdown with Ottawa over the imposition of a new one.

The province cancelled its tax on gasoline at the pumps and on home heating fuels just after midnight Thursday morning.

Later in the day, the legislature was to pass third and final reading of An Act to Repeal the Carbon Tax to make the change official.

The bill was a signature campaign promise of Premier Jason Kenney’s United Conservatives, who won a majority government last month.

Kenney told the house Thursday that the bill delivers a merciful end to a tax that didn’t stop the global rise of greenhouse gas emissions but did hurt working families.

“We have barely been in office for a month and we are already, today, delivering to Albertans the biggest tax break in our province’s history,” Kenney told the house as his UCP caucus members applauded.

In Ottawa, federal Environment Minister Catherine McKenna decried Alberta’s decision to end the provincial carbon tax, which she dubbed the “make pollution free again bill.”

She said Canada will move quickly to impose the federal version on Alberta.

“We’re looking to do it as soon as possible,” said McKenna.

Alberta now joins New Brunswick, Ontario, Manitoba and Saskatchewan — provinces that have declined to impose their own carbon levies, leaving Ottawa to impose one for them.

Kenney has said if Ottawa imposes its fee, he will join Saskatchewan and Ontario in fighting it in court.

Alberta is expected to argue that Ottawa does not have the constitutional authority to levy the tax and that, in any event, Alberta is already paying one with its current tax of greenhouse gases on large emitters.

Alberta’s fee, launched on Jan. 1, 2017 by the previous NDP government, taxed carbon at $30 tonne. Drivers were paying almost seven cents a litre more this year with the provincial carbon tax, along with $1.51 a gigajoule on natural gas for heating. Energy Efficiency Alberta says the typical Alberta household uses 120 gigajoules a year.

The federal tax is $20 a tonne but is set to rise annually until it hits $50 a tonne in 2022.

The Alberta tax brought in an estimated $2 billion, much of that rebated to low- and middle-income families. It also funded a range of green projects from rapid transit to energy-saving light bulbs.

Families will also get rebates from the federal tax.

McKenna said her department has already done preliminary math, given that Kenney’s bill was expected pass, and estimates a family of four in Alberta will get $700 in rebates when they file their 2019 taxes a year from now.

That’s higher than the $377 expected in New Brunswick, $451 in Ontario and $449 in Manitoba. A family in Saskatchewan would get $903.

The rebates are based on the expected amount people will pay. Provinces where coal and natural gas are used more heavily for heating and electricity are likely to shoulder higher carbon tax bills.

McKenna said Kenney is taking a page from the same playbook as Ontario Premier Doug Ford.

“They don’t have a plan to tackle climate change and they don’t have a plan to grow the economy,” said McKenna.

In the legislature, Kenney criticized and mocked former premier Rachel Notley for bringing in the provincial carbon tax, especially after not running on it in the 2015 election campaign.

He said the tax didn’t deal with climate change and didn’t deliver any “social licence” to garner further national or international support or acceptance of Alberta’s oil and gas industry.

“So what is the point?” Kenney said rhetorically.

“The best answer I can come up with is this: it makes them feel better about themselves. It makes them feel virtuous. And it makes the NDP feel like somehow they are saving the planet.”

— With files from Mia Rabson in Ottawa

Dean Bennett, The Canadian Press