Alberta is moving to turn its ambitious climate-change plan
into law with the introduction of legislation to tax purchases of all fossil
fuels, including gasoline and natural gas.
Bill 20, introduced on Tuesday, is one of the first major
steps by the Alberta government to formalize grand plans unveiled last
November, when it announced a sweeping climate-change plan meant to
significantly reduce or cap the province’s greenhouse-gas emissions.
Improving Alberta’s environmental reputation is seen as
crucial by the NDP government and some energy industry leaders, who believe
that the strategy will help attract investment in the oil and gas sector, put
greater emphasis on technology and renewable energy and win support to build
one or more new pipelines to Canadian coasts.
“The Climate Leadership Plan will diversify our economy,
create new jobs, improve the health of Albertans and erase any doubt about our
environmental record,” Environment Minister Shannon Phillips said. “It will
also open up new markets for our products.”
But critics believe that the carbon levies are being
introduced at the worst possible time for the province, which has seen its
unemployment rate jump and its economy shrink because of almost two years of
lower oil prices. Opposition parties argue that the levies, which are meant to
spur reductions in the use of fossil fuels, will raise the price of everything
for Albertans, and unnecessarily add to the costs for institutions such as
universities, colleges and charities.
Still, the province introduced legislation on Tuesday that
would enable the use of carbon levies on transportation and heating fuels,
formalize the new carbon price at $20 a tonne in 2017 and $30 a tonne in 2018,
and amend the Alberta Personal Income Tax Act to allow consumer carbon-levy
rebates.
The bill would also amend the Alberta Corporate Tax Act to
reduce small-business taxes to 2 per cent, from the current 3 per cent, next
year to help smaller firms adjust to the cost of the carbon tax.
The Climate Leadership Implementation Act would also lead to
the establishment of a new government agency to deliver energy-efficiency
programs and help to develop an energy-efficiency services industry.
Still to come are specific pieces of legislation related to
other aspects of the NDP government’s climate plan, including a 100-megatonne
limit on carbon emissions from the oil sands.
Rebates that would begin flowing to lower- and middle-income
Albertans in January, 2017, are meant to take the edge off the sting of the new
carbon taxes. For example, a couple earning up to $95,000 a year would receive
$300 annually, plus an additional $30 a child.
The province expects that the 60 per cent of Alberta
households that would receive the full, non-taxable rebate would have the
“direct” costs of the carbon levy more than covered by the rebate system.
However, officials say those same households could pay an
additional $70 to $105 annually in indirect costs related to the levies, as
Alberta-based companies pass on their new costs to consumers.
In its April budget, the government said it expects to raise
$9.6-billion through levies on both consumers and heavy emitters over the next
five years. The government insisted this week that the money raised from the
levies would go only to dedicated uses, including actions that address climate
change, or helping small businesses, First Nations or people working in the
coal industry adapt to the new scheme, as well as the household rebates.
Some uses would be exempted from the levy system, including
work done by farmers and First Nation communities – with further details to
come through regulations this year.
Last month, Calgary Mayor Naheed Nenshi said Alberta
municipalities should also be exempt from the carbon levies or should receive a
rebate. Mr. Nenshi said the levies would cost Calgary millions each year, and
could force the city to cut services or raise municipal taxes.
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