Alberta’s carbon levy came into effect January 1 as part of the provincial government’s Climate Leadership Plan (CLP) to transition the Canadian province to a greener, more diversified economy. Revenue from the levy will be reinvested back into Alberta to reduce emissions, support economic diversification and fund investment in green infrastructure, energy efficiency, renewable energy, bioenergy and innovation.
Alberta’s Climate Leadership Plan is a made-in-Alberta strategy that means new markets for our resources, rebates for families and lower taxes for small business. And it’s working. The approval of the Trans Mountain and Line 3 pipelines will encourage investment in our energy industry and generate thousands of new jobs, said Joe Ceci, President of Treasury Board and Minister of Finance.
Announced in November 2015, the carbon levy will be charged on all fuels that emit greenhouse gases (GHG) when combusted at a rate of CA$20 per tonne in 2017 and CA$30 per tonne in 2018. These include transportation and heating fuels such as diesel, gasoline, natural gas and propane.
Farmers and First Nations are exempt from the levy for certain fuels and uses. Rebates for 66 percent of Alberta households will help low- and middle-income families adjust. A 33 percent small business tax rate cut will help offset costs for small businesses.
A specific “Greenhouse Growers’ Rebate” also came into effect January 1 to allow greenhouse owners to recoup up to 80 percent of the carbon levy, bringing them in line with similar programs in effect in other jurisdictions.
According to a statement, even with the implementation of Alberta’s carbon pricing, the province continues to have an overall tax advantage compared to other provinces, with no provincial sales tax, health premium or payroll tax. Albertans and Alberta businesses will still pay at least CA$7.5 billion less in total taxes and carbon charges than if Alberta had the same tax system and carbon pricing as other provinces.
