Consumers won't notice carbon tax in price of consumer goods, Notley says

While Albertans will feel the effects of the carbon levy at the gas pumps Jan. 1, the new tax may not drive up the prices of some consumer goods, Premier Rachel Notley said Wednesday.

'Perhaps it won't trickle down at all' to consumer goods, premier says of new levy

Premier Rachel Notley defended her government's incoming carbon tax Wednesday in a year-end news conference with reporters at the Alberta legislature. (CBC)

While Albertans will feel the effects of the carbon levy at the gas pumps Jan. 1, the new tax may not drive up the prices of some consumer goods, Premier Rachel Notley said Wednesday.

Fielding questions from reporters during a year-end news conference, Notley was asked if Albertans will see the new carbon levy reflected in consumer items, such as a can of Coke.

"I think it would take a little while, and perhaps it won't trickle down at all," the premier said.

"If you look at what the carbon pricing will do to the price of gasoline relative to the rate at which the price of gasoline changes week over week, you will see that it is just a fraction of that.

"And you don't see prices [of consumer goods] go up and down every time we see a variance of 10 cents a litre at the pumps, so I don't know that you would see it as a result of an addition of 4 1/2, five [cents] this year, and seven or so next year.

"So I would expect that you wouldn't see significant changes ... I would say you wouldn't notice in consumer goods."

$20 per tonne carbon tax

Beginning Jan. 1, the NDP government is putting in place a $20 per tonne carbon levy on heating and transportation fuels, including diesel, gasoline, natural gas and propane.

The levy will increase to $30 per tonne by Jan. 1, 2018.

On gasoline, the levy will be 4.49 cents per litre, increasing by another 2.25 cents per litre on Jan. 1, 2018.

For diesel, it will be 5.35 cents per litre as of Jan. 1, increasing by another 2.68 cents per litre on Jan. 1, 2018.

The levy on natural gas, the most common home heating fuel in Alberta, will be $1.01 per gigajoule, increasing by another 51 cents per GJ on Jan. 1, 2018. The carbon levy will also apply to propane.

Rebates for low-income and middle-income families, means "those struggling with the economic downturn we're facing right now will be supported," Notley said.

Drivers will see new tax

She acknowledged that motorists who watch pump prices will notice a difference and will have to decide how to deal with it.

"If you see that there's a few extra cents, then it's not just a question of having a more fuel efficient vehicle, it could sometimes be a question of taking a bus, walking — you know, those kinds of things, in terms of the patterns of fuel use that people engage in."

The levy is designed to get people to lower their carbon emissions by putting a price on carbon.

Notley said she has heard support for the province's climate leadership plan from industry leaders and economists and also from regular Albertans. She said the government heard support when it held a series of town halls on the issue in the fall of 2015.

"We heard from them that they wanted a government that was going to take action, that would allow us to actually make progress on a matter that quite frankly worries a lot of people, and frankly the younger people are the more likely they are to be worried about it."

Wildrose projections 'torqued'

Notley told reporters she rejects projections from the Wildrose opposition that the new tax will lead to job losses across the economy.

"We can only rely on evidence we get from economists and review from experience in other jurisdictions. Our view is that estimates we have are pretty solid. We think Wildrose projections of hundreds of thousands of job losses are perhaps a little torqued."

Details of the carbon tax were introduced in April's provincial budget, and Notley made trips to Washington and New York this year to talk about it.

In late November, Prime Minister Justin Trudeau cited Notley's actions on climate change as a factor in his cabinet's decision to approve the Kinder Morgan Trans Mountain pipeline, which would take Alberta oil to tidewater in Burnaby, B.C.