Alberta imposing carbon levy Jan. 1

Gary Park

for Petroleum News

In a softening of the showdown between the Canadian and Alberta governments over carbon taxes, Alberta has gained federal approval to proceed with its own version of a tax on heavy industrial emitters of greenhouses gases, notably the oil sands sector.

Under the deal, Alberta will impose a C$30 per metric ton levy on Jan. 1, 2020, without coming to a final agreement on whether Alberta will comply with the federal benchmark of a C$10 annual increase to C$50 in 2022.

Alberta Premier Jason Kenney said he still opposes that annual increase because “we don’t want the federal government big footing into Alberta and enforcing their own separate regulatory regime.”

However, he conceded Alberta would not close the door on going to C$40 “if we have no choice except the imposition of a federal regime in Alberta.”

Kenney said hikes in the tax would hurt the competitiveness of his province`s oil and gas sector and “lead to the flight of capital and carbon leakage, basically from our energy sector to the energy sector in the United States that doesn`t have a carbon price.”

Still to be resolved is the dispute that the Canadian government is determined to impose on a consumer-based carbon tax of C$20 per metric ton on Jan. 1, rising annually to C$50.

In a few weeks the Alberta Court of Appeal will hear arguments on a Kenney government challenge to the constitutional right of Canada to impose the consumer tax.

That has pitted Alberta, Saskatchewan and Ontario in separate fights against the federal government, with Kenney arguing that the administration of Prime Minister Justin Trudeau should “not punish people for heating their homes and filling up their gas tanks.”

He said the new industrial tax is a “very detailed and credible program for emissions reduction through the levy price we are imposing.”

- GARY PARK