Alberta needs to gain leverage from federal carbon tax

With the economy in a shambles, Notley's conditional support of the Trudeau government carbon tax was pointed and necessary

alberta carbon taxRED DEER, Alta. Oct. 5, 2016/Troy Media – Only the delusional and the twisted – freemen, those outfitted with tinfoil hats and Donald Trump – truly believe taxes can be avoided.

The rest of us are well aware that author Daniel Defoe was correct: nothing is certain except death and taxes – including carbon taxes. The issues for rational people revolve around how much tax we pay, how it is spent, and how it modifies our behaviour and improves our future.

In return for the taxes we pay, Canadians have a right to expect (in no particular order):

  • sound money management;
  • good, accessible and cost-effective health care;
  • a good, accessible and cost-effective education system;
  • a broad range of other trustworthy services, from infrastructure to social supports;
  • to feel safe, with the help of a wise, consistent and efficient justice system, police and military;
  • freedom of movement and thought, privacy, opportunity and equality in all its manifestations;
  • and the right to complain about taxes, in all their various forms.

The federal government of Prime Minister Justin Trudeau and the Alberta government of Premier Rachel Notley were elected on promises to clean up a variety of environmental messes and, in Alberta’s case, improve the world’s perception of its most fundamental economic driver: the energy industry.

Trudeau has the Paris climate agreement’s distant targets ahead of him. If he is to come anywhere near reaching them, this carbon tax plan is likely only the first of many initiatives. (It doesn’t help that carbon taxes typically don’t reverse emissions growth.)

Notley has two problems: Alberta can’t get its oil to markets that will pay full price, and much of that potential marketplace believes Alberta’s oil is dirty.

Those kinds of problems, at both the federal and provincial levels, demand action. That action includes imposing carbon taxes. They may not amount to much when it comes to cleaning up the environment, but at least they are a start.

Federally, Canadians will pay $10 a tonne starting in 2018, with yearly increases thereafter until it reaches $50 a tonne.

In Alberta, a carbon levy of $20 a tonne will be applied to the price of all fuels that create greenhouse gases starting in January 2017. In January 2018, the levy will increase to $30 a tonne. At the same time, the energy industry will have to adapt to new, tougher emissions standards.

Rather than ensuring that the tax is [popup url=”” height=”1000″ width=”1200″ scrollbars=”1″]revenue neutral[/popup], the provincial government has decided that the money raised – $9.6 billion over the next five years – will be invested in “diversifying” our economy.

That means Albertans will dodge the federal tax levy until its level passes the province’s ceiling of $30 per tonne. Other provinces with similar taxes will also escape double dipping, while those provinces that are disinclined to introduce their own taxes – you can hear the bellowing in Saskatchewan now – don’t have a choice. They will contribute to the federal fund.

(According to the Canadian Taxpayers Federation, once the federal program reaches its peak in 2022, every Canadian family will be paying $2,569 more in taxes every year. Last spring, Alberta’s Wildrose Party said the carbon tax would cost Alberta families about $1,000 a year. And in B.C., which has had a carbon tax for almost a decade, a $30-per-tonne tax apparently costs the average household $125 a year. So the damage may depend on your math skills.)

In Alberta, we have already suffered too much damage. Something has to be done.

The economy is in a shambles. Investment has dried up, jobs have disappeared (we’re sitting at 8.4 per cent unemployment) and, according to an Angus Reid-CBC poll, the provincial mood may be approaching a cliff.

Notley apparently feels Albertans’ pain. Her reaction to the federal government’s carbon tax – which, ultimately, will gather 40 per cent more income than Alberta’s – was pointed.

“Alberta will not be supporting this proposal absent serious concurrent progress on energy infrastructure,” Notley said.

Translation: Alberta, and the rest of the nation, needs new oil pipeline projects built, and quickly.

Such tough talk is welcome, especially in a province that has generously made equalization payments to other provinces for decades and now needs the rewards to flow back to us.

That outcome should be as inevitable as taxes.

Troy Media columnist John Stewart is a born and bred Albertan who doesn’t drill for oil, ranch or drive a pickup truck – although all of those things have played a role in his past. John is included in Troy Media’s Unlimited Access subscription plan.

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