Premier Smith Responds to the Elimination of the Consumer Carbon Tax

Alberta Premier Danielle Smith has long criticized the consumer carbon tax, but she indicated she isn't concerned with Prime Minister Mark Carney's decision to abolish it. On Friday, shortly after Carney announced the elimination of the tax, Smith spoke with reporters in Calgary.

Smith emphasized that the real challenge for the new federal administration lies in how it will manage carbon pricing for industrial polluters. She noted that Carney has expressed that he believes the current rates for industrial emissions are not sufficient.

“Every time I have heard the new prime minister speak, he has said that he doesn’t think (industrial) prices are high enough,” Smith stated. She added that a significant increase in industrial carbon taxes would not benefit Alberta.

Carney's decision came about through an order-in-council, which he signed on his first day in office. Under this order, those receiving rebates from the carbon price will be eligible for one last payment in April, which coincides with the scheduled rise of the carbon price from $80 to $95 per tonne for greenhouse gas emissions.

The elimination of the consumer carbon tax was a commitment Carney made during his leadership campaign, alongside his pledge to raise the carbon levies on industrial activities.

Future Implications of Federal Carbon Policy

Alberta has operated its own version of an industrial carbon tax for over ten years. Smith expressed concerns about how any changes to federal regulations might compound existing provincial levies. She highlighted this uncertainty as a reason for wanting an immediate election, asserting, “That’s why we need an election — to get some clarity on just how badly he’s going to punish the oil and gas sector.”

For several years, Smith and her predecessor Jason Kenney have blamed federal carbon pricing for rising living costs, especially in Alberta. In 2019, when Kenney was premier, Alberta took legal action against the federal government to have the carbon pricing scheme declared unconstitutional; however, the Supreme Court ruled in favor of the federal government in 2021.

Last year, Smith's government initiated another lawsuit against Ottawa concerning the carbon tax, this time challenging an exemption for home heating oil consumers, primarily located in the Atlantic provinces.

Smith has repeatedly argued that the federal carbon tax is not only unfair but selectively enforced, and this could lead to greater financial strain on Albertans as costs escalate. She has also urged the federal government to consider exemptions for farmers using propane and natural gas.

Provincial Responses to Federal Tax Changes

Saskatchewan Premier Scott Moe, who has also demanded the federal government to scrap the carbon tax, has yet to comment on its recent repeal. Moe asserts that the carbon levy raises living expenses and negatively impacts businesses. In 2021, his government also pursued a Supreme Court challenge against the carbon pricing but met with defeat.

Saskatchewan took action last year to halt payments to Ottawa concerning the carbon levy on natural gas after it was reported that home-heating oil users were granted an exemption. The two governments eventually reached an agreement where Saskatchewan would pay half of what was owed until the issue was resolved.

Opposition NDP Leader Carla Beck reacted positively to the elimination of the carbon levy, expressing her approval and stating, “Great. Finally.” This change is expected to lower gasoline prices by approximately 17.6 cents per litre and reduce the cost of natural gas by about 15 cents per cubic meter.

carbon, tax, Alberta