Politics

McKenna announces carbon tax on Alberta a week after province kills former tax

Environment Minister Catherine McKenna says she has given Alberta notice that the federal government will begin imposing its price on carbon in the province beginning Jan. 1 2020.

In 2020, a family of four in Alberta can claim $888 in carbon tax rebate on income taxes

Environment Minister Catherine McKenna says she has written to Alberta to inform the province that the federal government will begin imposing the federal carbon tax in the province Jan. 1. 2020. (Fred Chartrand/Canadian Press)

Environment Minister Catherine McKenna says she has given notice to the provincial government in Alberta that the federal government will begin imposing its price on carbon in the province beginning Jan.1, 2020.

McKenna made the announcement in Ottawa today, a week after Alberta's Lt.-Gov. Lois Mitchell signed the province's Carbon Tax Repeal Act into law.

"As a result of Alberta's decision to make it free to pollute in Alberta, we will have the federal price on pollution," she said. "It's unfortunate, because Alberta had a made-in-Alberta plan to put a price on pollution."

McKenna said Canada needs Alberta to take part in the pan-Canadian framework on climate change because it's the province with the highest emissions in the country.

Under the terms of the framework — a deal agreed to by most of the provinces and the federal government in December 2016 — provinces had to develop policies to put a price on carbon through a carbon tax or a cap-and-trade system.

As a part of the plan, Ottawa said it would impose a tax on provinces that refuse to develop their own plans — at a rate of $20 on every tonne of greenhouse gas emissions starting in 2019, rising by $10 each year to $50 a tonne by 2022.

McKenna said that, by law, 100 per cent of the revenues collected federally will go back to Alberta — 90 per cent returned to families and the remaining 10 per cent directed to funding schools, hospitals, municipalities and green energy initiatives.

But because that revenue is being returned to families, a family of four in Alberta will be able to claim a rebate of $888 when they file their income taxes next year, she said.

"Its unfortunate that we're in this situation with another conservative premier ... who doesn't seem to understand that pricing pollution is proven, that provinces that have had a price on pollution have been the fastest-growing in the country and pricing pollution is the most efficient way to reduce emissions," McKenna said.

Environment Minister Catherine McKenna said the federal government will begin imposing a carbon tax on Alberta in January 2020. 1:12

Alberta's Environment Minister Jason Nixon said that with the provincial tax gone and the new tax not coming in until the new year, Albertans will enjoy some of the lowest gas prices in the country for the time being.

"Thankfully, Premier Kenney followed through on his promise of killing the carbon tax," he said. "We've removed that tax from our system and at least for the next several months, until January first, we won't have the burden of the carbon tax on our economy."

Nixon noted that the introduction of the federal tax hinges on the Liberals winning the October federal election.

"There will be a federal election in-between and many things can happen between now and January 1," he said.

Joining the conservative pack

Before losing the provincial election in April, NDP Premier Rachel Notley introduced a carbon tax in Alberta. The tax was imposed in 2015 but it did not take effect until Jan. 1, 2017.

It started at $20 per tonne of carbon emissions and increased to $30 the following year — but the annual price increases were put on hold by Notley after the construction of the Trans Mountain pipeline was halted.

The Carbon Tax Repeal Act was the first piece of legislation introduced by Premier Jason Kenney and his newly elected United Conservative government.

Kenney won the provincial election on a promise to kill the tax, saying it hadn't helped to reduce greenhouse gas emissions and took money out of the pockets of working families.

Kenney said his government will continue with a tax on large industrial greenhouse gas emitters and has promised to challenge the constitutionality of the federal carbon tax in court.

Alberta now joins four other provinces led by centre-right premiers — Ontario, New Brunswick, Manitoba and Saskatchewan — which have cancelled their provincial plans only to see the federal government impose its own.

Meeting the Paris targets

When Canada signed on to the Paris agreement, it pledged to cut greenhouse gas emissions 30 per cent below 2005 levels by 2030.

According to a report published today by the Parliamentary Budget Office, the pan-Canadian framework will not meet that goal without imposing a second tax of $6 a tonne in 2023, rising to $52 per tonne by 2030. If that plan was imposed on top of the Liberal framework, Canadians would have to pay as much as $102 per tonne by 2030.

In a statement, McKenna said that the federal government has "no plan to increase the price post 2022."

"We will meet our 2030 target through what we are already doing and new measures, including tackling plastic pollution, doubling the amount of nature that we are protecting, investments in clean tech and innovation," she said. 

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