Alberta carbon tax will scare off business and investment, warns opposition

Alberta's official Opposition says a new carbon tax will be a blow to business investment, during a time when it's desperately needed.

"Businesses want to invest in Alberta, and that means you have to have a lower tax base," Wildrose Leader Brian Jean said soon after the tax was announced Thursday.

"That means you have to have regulations that don't stop companies from coming into Alberta to invest," said Jean. "And that's not the case right now. You see tax after tax, and expenses are getting higher."

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But Finance Minister Joe Ceci defended the carbon tax, which the government introduced to help wean the province off revenues from non-renewable energy. A new rebate program cushions many Albertans against higher prices due to the carbon tax, Ceci said.

"This will help Albertans make better choices about their (fuel) emissions," said Ceci. "We believe that we'll be ahead of every jurisdiction in Canada."

Hard numbers

Albertans will soon pay more to fill their gas tanks and heat their homes, while industry's biggest emitters are asked to open their pocketbooks too.   

The new tax on gasoline, for example, will add an extra 4.5 cents per litre in 2017 and 6.77 cents per litre in 2018.

The hike will not show up on receipts, but will be included in the overall cost of fuel — on top of the existing fuel tax. The extra tax on natural gas tax is the exemption. The levy for that fuel will appear as a separate line item on each bill.

At the industry level, the fees that large emitters must pay for exceeding emissions targets will go up: from $20 per tonne in 2016, to $30 per tonne at the start of 2017.

Levy revenue is estimated to add up to $274 million in revenue in 2016-17, $1.2 billion in 2017-18, and $1.7 billion in 2018-19. Ceci said the money will be reinvested into the rebate program and the economy.

Rebate, repay

The new rebate program will help some Albertans recoup the extra costs from the tax — though it benefits mainly those with lower and middle incomes.

The cutoff to qualify for the full rebate is $95,000 net income for couples and families, and $47,500 for single adults. Partial rebates are available for couples who make up to $100,000 in net income, and up to $51,250 for single people.

In some cases, the rebate could give back more than people pay out through the new tax.

For a couple with two children, for example, the new tax will cost an estimated $338 per year. If that same family makes a net income of less than $95,000, they're eligible for a rebate of $360 ($200 for the first adult, $100 for second adult and $30 for each child).  

Residents will automatically be considered for the rebate when they file taxes.

Soft estimates

Albertans will have to wait to find out exactly how much the new carbon tax will cut down emissions. Government representatives could give no hard estimates when they unveiled the plan Thursday.

Much of that has to do with flexible targets the province currently has in place for carbon emissions. Right now in Alberta, there is no standard cap on greenhouse gas pollution.

Instead, the amount of carbon that industry is allowed to release into the air varies from plant to plant, and is based on each facility's historical records. So how much they are allowed to emit — and subsequently, how much they are charged for going over that limit — is hugely variable.

That system will soon change.

The province has promised to standardize greenhouse gas emissions caps starting at the end of 2017, bringing them into line with product and industry standards. But the details, say officials, won't be available until after consultation with industry members.

Albertans will also have to wait for details on a new flat cap on total emissions in the oilsands.

The NDP announced in November they will introduce a new law to legislate a yearly overall limit on oilsands emissions. But Thursday's budget included no specifics about how that limit would fit into the new carbon plan.