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'We campaigned on scrapping the job-killing carbon tax and Albertans responded loud and clear,' Jason Kenney said of Bill 1
CALGARY, Alta. – As expected, the first bill Alberta Premier Jason Kenney’s United Conservative government has tabled in the Legislature will end the province’s carbon tax on May 30.
“We campaigned on scrapping the job-killing carbon tax and Albertans responded loud and clear,” Kenney said of Bill 1: An Act to Repeal the Carbon Tax, which was introduced Wednesday.
The bill does not, however, repeal the carbon tax across the entire economy. It eliminates the tax on consumers and facilities that produce less than 100,000 tonnes of carbon per year, but larger industrial projects like coal-fired power plants will still pay their own version of the carbon tax, called the Carbon Competitiveness Incentive Regulation (CCIR).
The United Conservative government has said it will replace the CCIR with a new system in early 2020 that would drop the tax from $30 per tonne to $20 per tonne of CO2 on large emitters and use that money to invest in emissions-reducing technologies.
Economists and tax experts believe eliminating the carbon tax in Alberta will not spur major changes in consumer behaviour because the federal government has already signalled it would force a federal carbon tax on the province, as it did in Saskatchewan, Manitoba, Ontario and New Brunswick.
“I think the short-run changes are going to be limited,” said Kent Fellows, an economist and research associate at the University of Calgary’s School of Public Policy, speaking ahead of the bill being released. “The point of the carbon tax is not that everyone goes out tomorrow and trades in their gas guzzler for a bicycle.”
He said the carbon tax in Alberta and federally were designed to effect more longer-term changes in behaviour and, in the long-term, Alberta is likely to have a carbon tax. “I think the behavioural changes that we would expect are much longer term behavioural changes in general.”
Still, business groups expressed their support for repealing the carbon tax.
“The government’s repeal of the carbon tax burden off the backs of Alberta’s entrepreneurs will no doubt provide a much needed boost for the economy,” said Richard Truscott, vice-president of the Canadian Federation of Independent Business in a release circulated by the government.
Truscott said surveys of CFIB members show 85 per cent support eliminating the carbon tax.
The bill will eliminate the tax on consumers and small industrial emitters at midnight on May 30. At that point, fuel re-sellers like gas stations and power utility companies will not be allowed to apply the carbon tax to consumers.
However, the province is also implementing a series of transitional measures aimed at winding down the carbon tax framework over a longer timeframe. For example, those gas stations will be allowed to apply for a refund of the carbon tax they’ve paid for the fuel in their inventory but they must apply for the refund within 30 days.
The bill will also amend existing laws like the Alberta Personal Income Tax Act and the Fuel Tax Act and allow the province to use the money derived from the carbon tax on large emitters in any way it wants.
Under the previous NDP government, the money from the carbon tax was not used for general revenues but for rebates on energy efficiency products like solar panels and smart-home thermostats.
The province said the bill is expected to create 6,000 jobs by reducing costs on businesses.
“Repealing the carbon tax will leave more money for businesses to hire employees, and make it cheaper to move goods around the province and heat homes,” Alberta Finance Minister Travis Toews said in a release. “This is an important first step to improving our economy and getting Albertans back to work.”
The province’s largest employer, the oil and gas business, is not expected to make major changes as Ottawa has signalled it will impose a carbon tax on Alberta.
“I don’t think they’re going to make a lot of changes because despite what happens provincially, there’s always going to be what happens federally,” said Reynold Tetzlaff, PwC Canada’s National Energy Leader, of the Canadian energy industry.
“(Energy companies have) already released to the public what their plans are, so I’m not sure this will have as drastic of a change,” Tetzlaff said.
Tetzlaff said the new UCP government’s promises of “red tape reduction” and streamlined regulatory reviews would have a larger impact on oil patch hiring and investment than repealing the carbon tax repeal.
Copyright Postmedia Network Inc., 2019