Alberta introduces bill to implement carbon tax

The typical Alberta household will pay an additional $70 to $105 each year in indirect costs for goods and services under the province’s controversial new carbon tax.

Typical household will pay an extra $70 to $105 in indirect costs for goods and services

Environment Minister Shannon Phillips announced details of her new climate leadership bill on the rooftop deck of the Federal Building in Edmonton. (Michelle Bellefontaine/CBC News )

The typical Alberta household will pay an additional $70 to $105 each year in indirect costs for goods and services under the province's controversial new carbon tax.

This figure, provided by government officials Tuesday, is in addition to the direct costs consumers will pay for fuel and home heating that were announced in last month's budget.

The government plans to provide rebates to lower-income Albertans to cover the direct costs.

Environment Minister Shannon Phillips said the rebates are a little bit higher to help low-income Albertans deal with costs passed on to them by businesses for goods and services.

"The lowest income folks are the lowest users of energy," she said. "They are getting their rebate back at an average, they're actually going to come back ahead."

On Tuesday, Phillips introduced Bill 20, which gives the government the legislative authority to implement the carbon tax, set to take effect Jan. 1, 2017.

She said the bill puts the Alberta government at the front of the battle against climate change.

"For too long, governments in Alberta chose to ignore and deny the problem. That approach didn't work," she said. "Alberta can't move forward if we are stuck in the past."

First cheques in January

The details of Bill 20 were previously announced in the budget.

The government is providing full and partial rebates to 66 per cent of Albertans to cover the direct costs of the carbon tax.

By 2018, a couple with two children will pay $508 extra a year under the carbon tax. Families with a combined household income of $95,000 will get a full rebate of $540. A couple with two children will not qualify for a rebate if they make more than $101,500 a year.

People who qualify will start receiving their first cheques in January 2017.

Relief for small business will come in the form of a drop in the tax rate from three to two per cent, starting Jan. 1, 2017. Bill 20 makes the necessary changes to the Alberta Corporate Tax Act.

The bill also establishes Energy Efficiency Alberta, an agency that will provide programs and information to help people reduce their energy consumption. The province intends to have it operating by January 2017.

On Jan. 1, large emitters will pay a carbon price of $20 per tonne for emissions that go above their target. The price rises to $30 a tonne on Jan. 1, 2018. 

The carbon tax is expected to raise $9.6 billion over five years. The reduction in the small business tax rate will cost the province $865 million.

The government plans to spend $165 million in 2018-19, $170 million in 2019-20 and $175 million in 2020-21 on reducing energy costs.

Treasury Board economists calculated the indirect costs to Albertans using Statistics Canada figures for 473 commodities across 235 different industries.  A typical household has 2.6 people.

No benchmarks 

Opposition MLAs says they have many questions about the tax.

Alberta Party Leader Greg Clark supports action on climate change but said there are no benchmarks to measure the success on the carbon tax, particularly on getting pipelines built. 

"Acting on climate change is important, but ensuring that we understand not just the benefits but the costs of that is really incumbent on government," he said. 

The government estimates the carbon tax will reduce greenhouse gases by 30 megatonnes in the first few years, moving up to 50 megatonnes over today's numbers in 2030.

Clark said the targets Canada agreed to in Paris suggests Alberta would have to reduce emissions even more. 

The Wildrose Party has estimated the carbon tax will cost the average Alberta household $1,000 in direct and indirect costs.

Wildrose Leader Brian Jean said the tax will hurt families and make Alberta less competitive. 

"It's time for the NDP government to rethink this carbon tax, to reconsider it, and really truly consider the impact it will have on everyday working Alberta families who were not asking for it and did not expect it as it was not campaigned for in last year's election," he said. 

Jean said a Wildrose government would refute claims that Alberta oil is the dirtiest in the world. He said they would also move Alberta towards the use of natural gas and clean coal technology.