EDMONTON—Conservative leaders across the country likely found the results of October’s federal election taxing. And come January, Albertans might, too — at least when it comes to the cost of fuel.

Policy on the environment and energy was a big talker during the campaign period, with the federal Conservatives vowing to scrap the Liberal carbon tax, which took effect in April for provinces such as Ontario, Manitoba, Saskatchewan and New Brunswick, none of which have their own comparable plan to price pollution.

But now that the Liberals have another mandate, albeit a minority, the carbon tax is here to stay, at least for the time being. And Alberta is soon likely to find itself on that list of provinces paying under the federal plan.

Why doesn’t Alberta have a carbon tax?

In the lead up to Alberta’s provincial election in April, the United Conservative Party campaigned on a promise to kill the carbon tax put in place by the previous NDP government in 2017, which was introduced as part of its climate leadership plan two years prior.

Revenue from the tax was used to fund infrastructure and climate-related projects in the province. In most cases, it was paid back to Alberta households that qualified for a rebate.

The UCP promise to repeal the provincial carbon levy was fulfilled with Bill 1, which became law when it received royal assent in June.

Before that, the province was paying a price of $20 per tonne of CO2 in 2017, a cost that climbed to $30 per tonne in 2018, falling in line with the federal standard for a pollution pricing plan.

While in government, the federal Liberals mandated that provinces must either adopt a carbon pricing plan — starting at $10 per tonne and rising to $50 per tonne by 2022 — or a cap-and-trade plan.

Now that Alberta has no plan, Ottawa is expected to impose one under the federal Greenhouse Gas Pollution Pricing Act, passed in December 2018.

When does the federal carbon tax hit Alberta, and how much will it cost?

Once Alberta’s Bill 1 passed into law, the federal government said it would waste no time implementing a carbon tax in Alberta. It set a starting date of Jan. 1, 2020.

Following federal carbon pricing standards, Albertans will go back to paying $20 per tonne of CO2 on Jan. 1, 2020, according to the federal government. Then in April 2020, the price will rise to $30 per tonne of CO2. From there, it’s expected to climb by $10 per year until topping out at $50 per tonne in 2022.

But for Alberta households next year, the pinch won’t feel any stronger than it did before the province repealed its own tax, explained Trevor Tombe, an economics professor at the University of Calgary.

“For most Albertans in their everyday life, they’re not going to notice any difference between the federal carbon tax that’s going to come in January 1, and the one that prevailed previously, prior to it being eliminated,” he said.

With the tax being tacked onto fuels such as gasoline and natural gas, Albertans will likely see the difference at the pumps and on their home heating bills.

According to the Government of Canada, in April 2020, the added fuel charge on gasoline will be 6.63 cents per litre, while the charge for natural gas used in home heating will be 5.87 cents per cubic metre.

But, Tombe added, Albertans will also be eligible for rebates, similar to the ones offered through the former provincial carbon tax.

“Provincially, some of the revenue was used for household rebates, but those were targeted at lower and middle income households, so not everyone received them, whereas the federal revenue is going to be recycled almost entirely back to households and smaller businesses,” he said. “So 90 cents of every dollar earned by the federal government on this tax from Alberta will go back to Alberta households as a direct cash transfer.”

According to the feds, the bulk of the proceeds from federal fuel charge in Alberta will be returned directly to eligible individuals and families residing in Alberta through Climate Action Incentive payments.

Loading... Loading... Loading... Loading... Loading... Loading...

That works out to $444 for a single adult or the first adult in a couple, $222 for the second adult in a couple or the first child of single parents, and $111 for the second child of single parents, and each child in a two-parent family.

So what else makes the federal tax different from the one that was scrapped?

The other major difference between the former provincial carbon levy and the federal tax looming on the horizon, Tombe notes, is who controls the cash.

According to the feds, the Government of Canada will return all direct proceeds collected in Alberta from the federal fuel charge through direct payments to families and investments to reduce emissions.

“The main tradeoff here for the province is that when it is done through the federal government, the province has no discretion over the use of those funds,” Tombe said. “Provinces, if they implement their own pricing system, can then decide to use the revenue for other objectives — either spending on environmental projects or in the case of B.C., lowering income taxes, personal and corporate, and so on.”

Money from Alberta’s carbon tax, for example, was used to fund transit projects like the Green Line in Calgary and the Valley Line in Edmonton, as well as flood prevention infrastructure such as Calgary’s Springbank Off-Stream Reservoir, and initiatives aimed at improving energy efficiency through provincial programs.

According to the federal government, the rest of the carbon tax proceeds will be used to provide support to schools, post-secondary institutes, hospitals, municipalities, not for profit organizations and Indigenous communities, as well as small and medium-sized businesses.

What is Alberta’s government doing about it?

Alberta Premier Jason Kenney said the fight against the federal carbon tax will continue through the courts.

In June, Alberta Justice Minister Doug Schweitzer said the province sees the carbon tax as a “federal overreach” into the province’s ability to manage its own affairs.

“Greenhouse gas emissions are produced primarily by entities and activities that fall exclusively within provincial jurisdiction,” Schweitzer said in June.

Like Saskatchewan and Ontario, Kenney has vowed to fight the federal carbon tax in court once it comes into effect.

“We are joining Saskatchewan in their Supreme Court case, we will join Ontario in their case if it goes to the Supreme Court, and we will be launching our own reference to clarify that a federal carbon tax is unconstitutional,” Kenney’s spokesperson Christine Myatt said in a statement in June.

The Ontario Court of Appeal ruled in June that Ottawa’s Greenhouse Gas Pollution Pricing Act is constitutional, as did Saskatchewan’s top court. Both provinces are appealing the respective decisions to the Supreme Court of Canada.

With files from Nadine Yousif, Claire Theobald and Kieran Leavitt

Read more about: