EDMONTON—A recent analysis of the carbon tax shows the controversial fee may not be as costly for average Albertans as some public discourse surrounding it suggests.

New research by the University of Calgary found that the provincial carbon tax, which came into effect in January 2017 to encourage households and businesses to reduce their fuel emissions, cost the “overwhelming majority” of Alberta families less than $500 last year, and that four out of 10 of those households received rebates that exceeded the amount they paid.

“We very rarely see families that have (carbon tax) costs over $1,000,” said Trevor Tombe, an economics professor at the University of Calgary and lead researcher.

Alongside his colleague Jennifer Winter, Tombe examined Statistics Canada data that tracked down how much fuel was used by each Alberta household in 2018 to estimate the cost of the provincial carbon tax for Alberta families. Tombe said his findings show the carbon tax fee varies widely by household, depending on factors such as how many vehicles a family owns, and how large the house is.

But a common thread he observed was that households with higher incomes tended to pay more than lower-income ones, which also correlates to the size of the house and the number of vehicles. Still, only 1.2 per cent of Alberta households were charged a carbon tax that exceeded $1,000, Tombe said.

“Sometimes we hear some exaggerated claims around how much the carbon tax costs might be, and often they’re in the thousands,” Tombe said. In reality, however, the tax usually cost most households no more than a few hundred dollars in 2018, and some families made a small profit from the tax with the help of provincial tax rebates.

Since the provincial carbon tax’s implementation in 2017, the Alberta government also began giving out rebates to eligible households. These rebates run around $300 for an individual, Tombe said, and $540 for a family of four. A deeper dive into these numbers showed that 40 per cent of Alberta households “didn’t see their bottom line pinched as a result of the policy brought in 2017,” Tombe said.

That percentage gets higher for families on the lower-income spectrum — 70 per cent of families earning $60,000 or less received a rebate that is a larger amount than what they paid toward the provincial tax, Tombe said.

Tombe’s research also shows that rebates would be higher if the province were to scrap its own carbon tax policy and adopt the one drafted by the federal government.

Under the federal government’s carbon tax, 80 per cent of Alberta households would receive rebates that exceed the amount of money they paid into the tax, as most of its revenue is given back in the form of rebates. This differs from the provincial carbon tax’s revenue, which is divided between rebates and infrastructure or energy efficiencies programming, among other things.

By examining Saskatchewan’s model — a province with a similar fuel emissions profile to Alberta that is currently under the federal carbon tax model — Tombe estimates rebates for a family of four would be around $800.

Tombe said he hopes his research sheds light on a topic that is highly debated in the province, particularly in recent months as Alberta heads into its next provincial election sometime before May. The main takeaway, he said, is that the carbon tax is complex and varied.

“There’s not one single number you can point to as the cost to Alberta families, because everybody is slightly different,” Tombe said. He added this research is only one dimension to the overall conversation on the carbon tax and climate policy.

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Nadine Yousif is a reporter/photographer for Star Edmonton. Follow her on twitter: @nadineyousif_

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