Alberta applying for judicial review of carbon levy exemption on home heating oil

Premier Danielle Smith says Alberta has applied for a judicial review of Ottawa's exemption of the carbon levy on home heating oil.

At a Tuesday announcement, Smith said it is "blatantly" unfair to Albertans who rely on natural gas to heat their homes, and relief can't wait with cold winter weather coming.

Justice Minister Mickey Amery said it took about a year for the province to assemble its legal argument and he expects it will take another year to work its way through Federal Court.

The province is asking the court to declare the exemption both unconstitutional and unlawful in hopes of seeing the carbon levy axed altogether.

"The federal carbon tax has always been unfair, but the selective way it's being applied now is also unconstitutional, and the impacts on Albertans will only get worse as the costs continue to increase," said Smith.

Amery said providing a benefit to those who use heating oil, predominantly in Atlantic Canada, undermines what is supposed to be a national standard aimed at meeting emissions targets.

Prime Minister Justin Trudeau's Liberals have said carbon pricing was designed to combat climate change and put more money into the pockets of Canadians in the form of rebates.

But Smith said the levy is increasingly contributing to rising consumer costs, and taxpayers are being hit in other ways.

The premier said her government projects that Alberta school authorities will have to pay more than $60 million per year by 2030 without receiving any rebates.

In the past, Smith has urged lawmakers in Ottawa to pass an exemption for farmers using propane to dry grain and natural gas to heat barns.

When Ottawa offered the three-year exemption for home heating oil, it also announced it would double the rebate for rural Canadians.

On Tuesday, Smith told reporters she has not had any direct conversations with the federal government ahead of time about the application for the judicial review.

"But we've been letting them know for some time, for many years, that we're not happy with the approach that they're taking," said Smith.

Past legal battles

Her predecessor, former UCP premier Jason Kenney, repealed the previous NDP government's consumer carbon price once he came into office, forcing the federal backstop onto the province.

Sparking a legal battle in 2019, Alberta's government argued the levy was unconstitutional.

The Supreme Court of Canada ultimately upheld the federal law in 2021.

Alberta NDP Leader Naheed Nenshi said Smith is dredging up a one-year-old issue and sparking a performative, lengthy and unwinnable legal fight with Ottawa rather than work to get a better deal for Alberta.

"Could it have anything to do with her [party] leadership [review] on Saturday?" said Nenshi.

Nenshi dismissed Smith's legal threats as "endless lawyer job creation," and said they haven't helped a singled Albertan deal with rising costs.

He told reporters in the legislature the federal government's carve out for home heating oil poisoned the well of public support.

Nenshi didn't say whether he wants to see the carbon price repealed, saying it depends on whether the Liberals remain in office.

"If the Conservatives take power federally, there will be no consumer carbon tax, and we've got to figure out an emissions reduction plan that gets us to net-zero targets, which even this UCP government have," he said.