Alberta carbon tax takes hold, gas prices go up

Alberta's carbon levy took hold on Jan 1., after a year of protests and heated debate between provincial government parties.

'We could have waited for Ottawa to act and have a plan imposed on us, but Albertans don't lead from behind'

Prices at some Edmonton gas stations rose well past $1 per litre on New Year's Day, as Alberta's carbon levy took hold. (David Thurton/CBC)

After a year of protests and heated debate between government parties, Alberta's carbon levy has gripped the province.

"I understand why some people are concerned and have questions, after all the levy is a new cost," deputy premier Sarah Hoffman said at a news conference on Sunday.

"Today I call on all those who have been fighting our climate leadership plan to stand with us."

As of Jan. 1, the levy — termed "price on carbon" by Alberta's NDP and "carbon tax" by opposition parties — added 4.5 cents per litre for regular gasoline and 5.3 cents per litre for diesel.

Prices crept past $1 per litre, on average, in the final days of 2016. 

On New Year's Day, fuel bills at some gas stations jumped nearly five cents per litre.

Some drivers filling up before carbon tax goes into effect 0:49

To offset the added cost, Hoffman said more than 60 per cent of Albertan families will receive a full rebate for the levy.

"We're proud to act and move forward on this," she said, before citing benefits such as job growth, a more diverse and stable economy, as well as protecting the environment. 

Money from the levy will be re-invested into the province, Hoffman added.

"Yes, we could have waited for Ottawa to act and have a plan imposed on us, but Albertans don't lead from behind. With a climate leadership plan we rightfully take our place as global energy leaders."

'Breaking the land lock'

Without a carbon levy, Hoffman said the Trans Mountain pipeline could not have been approved by the federal government. If completed, the project would open Alberta's oilsands to international markets.

"Make no mistake, our climate leadership plan is the reason that Alberta is breaking the land lock," Hoffman said.

The "yelling, screaming and finger-pointing by former governments" has failed to address that specific challenge, she added.

"To be frank, I think they don't even want us to get pipelines because I think they care more about this government failing, than about Albertans benefiting from all of the opportunity that exists as we move forward."

Ignored call for referendum

The carbon levy's launch ignores a call by Alberta's Wildrose opposition party to hold a referendum first.

In December, Wildrose leader Brian Jean said the NDP needed approval for the carbon levy because it wasn't mentioned during the 2015 election campaign.

He also argued the levy would cost Albertans unnecessarily in the years before an even higher, federally-mandated carbon levy takes hold. Under the federal plan, the price on carbon will increase to $50 per tonne by 2022.

If his party wins the next election, Jean has said he's prepared to sue the federal government over its carbon levy.

Alberta's carbon levy took hold in the province on New Year's Day. (Lydia Neufeld/CBC)

With files from CBC's Michelle Bellefontaine