Feds approve Alberta’s carbon tax on big industrial emitters

Tax will be applied on 10 per cent of emissions produced by the province’s biggest polluters

Liberal MP Jonathan Wilkinson arrives for the cabinet swearing-in ceremony in Ottawa on Wednesday, Nov. 20, 2019. The federal government is giving the Alberta government a passing grade for its industrial carbon tax. Environment Minister Jonathan Wilkinson says today his department agrees Alberta’s planned $30 a tonne carbon price on emissions from big industry meets federal requirements. (Adrian Wyld / THE CANADIAN PRESS)

Liberal MP Jonathan Wilkinson arrives for the cabinet swearing-in ceremony in Ottawa on Wednesday, Nov. 20, 2019. The federal government is giving the Alberta government a passing grade for its industrial carbon tax. Environment Minister Jonathan Wilkinson says today his department agrees Alberta’s planned $30 a tonne carbon price on emissions from big industry meets federal requirements. (Adrian Wyld / THE CANADIAN PRESS)

The federal government is giving the Alberta government a passing grade for its industrial carbon tax, avoiding at least one showdown with the province over climate change.

In late October, Alberta unveiled a system to impose a $30-a-tonne tax on greenhouse-gas emissions from big industry, including the oilsands. The tax will be applied on 10 per cent of emissions produced by the province’s biggest polluters starting in 2020.

Federal Environment Minister Jonathan Wilkinson said Friday his department agrees that plan will meet federal requirements that each province have a price on pollution from big industrial emitters. Provinces that don’t will have a federal version imposed on them. The government amended regulations to exempt Alberta from the federal system for industry on Friday.

“We are very pleased that Alberta has now agreed to commit to putting in place a price on pollution at least with respect to heavy emitters,” said Wilkinson.

But Wilkinson immediately noted Alberta does not have a carbon tax on consumer fuels like gasoline, natural gas and propane, and so the federal carbon tax for consumers, starting at $20 a tonne, will start being applied in the province on Jan. 1. And Alberta’s Environment Minister Jason Nixon said the province’s legal challenge over that, filed earlier this year, will continue.

READ MORE: Saskatchewan, Ottawa carbon tax case ‘monumental’ for Constitution — expert

Lower courts have already dismissed similar challenges from Saskatchewan and Ontario, and the Supreme Court of Canada is to hear the cases early in 2020.

Carbon taxes on big emitters are applied on a portion of emissions from major industry to encourage innovations that shrink their carbon footprints — more efficient processes that produce less waste, better capturing of greenhouse gases before they’re vented. The idea behind taxing only some industrial emissions is that technology doesn’t exist to reduce industrial emissions to zero, so the tax is generally only applied on the portion of emissions a company can reasonably be expected to eliminate.

In Alberta, more than half the province’s emissions come from industrial sources. More than 100 Alberta companies fall into the category that will pay the industrial carbon tax, including oil producers, coal and natural-gas power plants, fertilizer makers and chemical companies.

Consumer carbon taxes are applied based on all of the emissions produced by burning fossil fuels in cars and homes and small businesses. They are designed to encourage individuals to reduce their own emissions by driving less, making their homes more energy-efficient or buying zero-emissions technology like electric cars and home solar panels.

READ MORE: Alberta tables climate plan for industry; retains key parts of old legislation

The federal government rebates a year’s average carbon-tax payments at income-tax time, so people who produce lower-than-average emissions can come out ahead.

The federal consumer charge has been applied in Saskatchewan, Manitoba, Ontario and New Brunswick since April 1. Alberta was initially among the provinces exempted because it had its own emissions-related fuel tax but Premier Jason Kenney scrapped that at the end of May after his United Conservative Party defeated the Alberta New Democrats in an election.

As it is doing in the other provinces with the federal carbon tax, Ottawa will also begin compensating Alberta taxpayers for the cost of the carbon tax.

Alberta set the $30-a-tonne price in its industrial system specifically to meet the federal requirement, but Kenney said Friday he hasn’t decided yet if the fee will rise to $40 and then $50 a tonne over the next two years, as federal standards require. He said that would just push more capital out of Alberta and contribute to “carbon leakage,” where emissions just move from one country to another when companies try to avoid carbon pricing.

“So we don’t think that helps global emissions and it certainly hurts the Canadian economy,” Kenney said. “We’ll have to make a prudent judgement when it gets closer to that date. Because one thing we don’t want is the federal government big-footing into Alberta and enforcing their own separate regulatory regime.”

Mia Rabson, The Canadian Press

READ MORE: Federal carbon tax coming to Alberta in January — environment minister

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

COVID
Red Deer down to 313 active cases of COVID-19

Alberta reports an additional 411 COVID-19 cases

THE CANADIAN PRESS/Alex Panetta
Economists “cautiously hopeful” for economic recovery in Alberta

Charles St. Arnaud says Alberta’s recovery will rebound along with roll-out of the COVID-19 vaccine

Alberta’s chief medical officer of health Dr. Deena Hinshaw acknowledged that Friday would be one year since the first case of COVID-19 was identified in the province. (photography by Chris Schwarz/Government of Alberta)
Three more Red Deer COVID-19 deaths, 331 active cases in Alberta

Red Deer is down to 362 active cases of the virus

Image curtesy Metro Creative Connection
County of Wetaskiwin addresses unpaid oil and gas taxes

The County of Wetaskiwin is addressing unpaid oil and gas taxes and… Continue reading

Caitlin Kraft, the sister of Jeffery Kraft, stands third from the left, holding a sign calling for the maximum sentence for Campbell, who is charged with manslaughter. (Photo by Paul Cowley)
UPDATED: Judge again rejects submission of 7-year sentence for slaying of Kraft

Tyler John Campbell charged with second-degree murder for December 2019 homicide

Hockey hall-of-fame legend Wayne Gretzky, right, watches the casket of his father, Walter Gretzky, as it is carried from the church during a funeral service in Brantford, Ont., Saturday, March 6, 2021. HE CANADIAN PRESS/Nathan Denette
Walter Gretzky remembered as a man with a ‘heart of gold’ at funeral

The famous hockey father died Thursday at age 82 after battling Parkinson’s disease

Supporters rally outside court as Pastor James Coates of GraceLife Church is in court to appeal bail conditions, after he was arrested for holding day services in violation of COVID-19 rules, in Edmonton, Alta., on Thursday March 4, 2021. THE CANADIAN PRESS/Jason Franson
‘Law remains valid:’ Pastor accused of violating health orders to remain in jail

The Justice Centre for Constitutional Freedoms is representing the pastor

A decommissioned pumpjack is shown at a well head on an oil and gas installation near Cremona, Alta., Saturday, Oct. 29, 2016. The Alberta Energy Regulator says it is suspending all of the licences held by an oil and gas producer with more than 2,200 wells and 2,100 pipelines after it failed to bring its operations into compliance. THE CANADIAN PRESS/Jeff McIntosh
Alberta Energy Regulator suspends licences of oil and gas producer that owes $67M

The company is being asked to comply with past orders to clean up historic spills and contamination

Prime Minister Justin Trudeau holds a press conference in Ottawa Friday, March 5, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Trudeau holds firm on premiers’ health-care funding demands, COVID-19 aid comes first

Premiers argue that the current amount doesn’t keep pace with yearly cost increases of about five per cent

Seniors in the 65-unit Piper Creek Lodge are among those waiting for COVID-19 vaccinations. (File photo by Advocate staff)
Central Alberta senior lodges anxiously waiting for COVID-19 vaccinations

“Should be at the front of the line, not the back of the line”

Pictured here is Stettler’s Jenner Smith with a guide dog from Aspen Service Dogs. An online auction will be running soon to help raise funds for Jenner to receive his very own service dog later this year. Jenner, who is four years old, was diagnosed with Autism Spectrum Disorder in 2019. photo submitted
An online auction is planned to raise funds for a service dog for a Stettler family

Jenner Smith, four, was diagnosed with Autism Spectrum Disorder in 2019

Walter Gretzky father of hockey hall-of-famer Wayne Gretzky waves to fans as the Buffalo Sabres play against the Toronto Maple Leafs during third period NHL hockey action in Toronto on Tuesday, Jan. 17, 2017. THE CANADIAN PRESS/Nathan Denette
Walter Gretzky, father of the Great One, dies at 82

Canada’s hockey dad had battled Parkinson’s disease and other health issues

Most Read