UCP dodges question on re-litigating federal carbon tax

According to the Parliamentary Budget Officer (PBO), the typical Albertan household will lose $2,773 annually from the carbon tax by 2030. Its upper quintile will pay $7,402 after accounting for the carbon rebate that year — the highest cost nationwide.

  • Rebel News
  • May 04, 2023
  • News Analysis
UCP dodges question on re-litigating federal carbon tax
The Canadian Press / Justin Tang
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Rebel News asked the UCP Wednesday if they still intended to re-litigate the federal carbon tax with the Supreme Court of Canada. They responded with a pivot on how expensive the carbon tax is for Albertans.

"In a CBC interview last October, Premier Danielle Smith opened the possibility of the province re-litigating the Supreme Court on the federal carbon tax. Have there been any conversations on whether that would be pursued soon?" Rebel News asked UCP Candidate Brian Jean.

"The UCP is always going to stand up for Albertans, and the carbon tax is something that puts a tax on everything and makes life more expensive," said Brian Jean, UCP Candidate for Fort McMurray-Lac La Biche. In March 2021, the Supreme Court upheld the federal carbon tax in a 6-3 decision despite legal challenges from Alberta, Saskatchewan and Ontario.

Premier Danielle Smith told the CBC in October that could be in the cards if presented with "new information," according to legal advice she received.

"We have new information. We have a war in Ukraine. We have a global world increase in prices. We have global instability. We have an affordability crisis," she said, adding a re-litigation of the carbon tax is one way to address concerns about the rising cost of living.

According to the Parliamentary Budget Officer (PBO), the typical Albertan household will lose $2,773 annually from the carbon tax in 2030. Its upper quintile will pay $7,402 after accounting for the carbon rebate that year — the highest cost nationwide.

"When you consider how everybody else is dealing with the carbon tax, this will hurt Albertans harder than anybody else in Canada, except for maybe Saskatchewan," added Jean. "We need to make sure Albertans realize this before the election."

The PBO said Saskatchewan and Alberta incur the highest carbon tax costs, with the top fifth of income earners paying $7,402 and $5,123 by 2030, respectively.

On November 29, Smith announced the UCP would suspend the gas tax from January to June 2023. She claimed it is "designed by the wealthy and well-connected" while not readily impacting their household finances as it does everyone else. 

According to PBO Yves Giroux, the carbon tax "is a progressive tax." He said the top 60% of households pay more tax than they receive in rebates, while the bottom 40% receive more refunds than they pay — switching to only the bottom 20% in 2024/25.

"If you do the average, yeah, it's true, it's going to cost more money to people, but the people who are paying are the richest among us, which is exactly how the system was designed," said federal Environment Minister Steven Guilbeault in a CTV interview last month.

"The rich pay more for their carbon consumption and pollution, and we're supporting, through the transition, middle-class Canadians and low-income Canadians, and that's exactly what we're doing."

The PBO confirmed that "most households incur a net loss" from the carbon tax rebate in 2030/31 when the levy is $170 per tonne. 

Passed in 2018, the Greenhouse Gas Pollution Pricing Act capped the tax at $50 per tonne. However, the federal carbon tax will increase from $50 per tonne in 2022 by $15 per year until it reaches $170 per tonne in 2030. 

The federal carbon tax currently costs 14.4 cents per litre of gasoline, up from 8.8 cents in 2021. That is expected to rise to 37.6 cents in 2030. Albertans will pay 67.8 cents in fuel taxes per litre of gas at that time.

Smith wrote to Prime Minister Justin Trudeau last November to highlight her concerns about another carbon tax hike. According to the PBO, typical Albertan households are on the hook to lose upwards of $710 annually this year.

Alberta's premier demanded Ottawa cancel its planned and gradual tripling of the carbon tax to $170 per tonne by 2030. She said it contributed to higher inflation and borrowing costs for Albertan households. 

Last March, the Bank of Canada Governor, Tiff Macklem, confirmed that the federal carbon tax bolstered inflation by 0.4 percent. Despite the economic hardship posed by the COVID pandemic, the feds hiked the carbon tax to $40 per tonne on April 1, 2021, and again another $10 the following April.

"It's to make life more painful for the poor and the powerless, and with that tax set to go up again in the middle of winter, when inflation is eating more and more into your hard-earned dollars," said Smith. 

"Premier Rachel Notley could have fought for you, but she made a different choice," she continued. "She chose to abandon the hundreds of thousands of Albertans to higher energy costs to seek the approval of the Trudeau Liberals." 

Alberta Canada Carbon Tax News Analysis United Conservative Party Alberta Legislature Alberta Decides
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