Given that the federal carbon tax’s days could be numbered, we shouldn’t expect Alberta’s government to suddenly embrace carbon pricing. However, the key to countering Ottawa’s uneven and unfair application of the tax might just lie in a made-in-Alberta plan.
It was, ironically, the UCP that ushered in the federal carbon tax in Alberta. Once Rachel Notley’s carbon tax was scrapped, Justin Trudeau’s tax filled that void. After Alberta lost its constitutional challenge, the UCP government seemed out of ideas, other than to criticize the tax and hope that it would just go away.
Thanks to a potent cocktail of naiveties, ineptitude and short-sighted political calculations, the Liberals have done a remarkable job of turning public opinion against their own central climate change policy. Despite that, they remain in government and the tax remains in place.
There are many ways in which the feds have weakened their carbon pricing scheme, but three stand out: the three-year exemption for home heating oil (while still applying the tax to natural gas for home heating), accepting a de facto lower carbon price in Quebec (resulting from its cap-and-trade system), and pursuing an emissions cap on the oil and gas sector (the carbon price doesn’t otherwise distinguish between sources of emissions).
Sovereignty Act rhetoric aside, there’s not much Alberta can do on the emissions cap short of launching another court challenge. However, when it comes to the other two slights, Alberta could effectively counterpunch via our own carbon tax.
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The regulations around the federal carbon tax mandate is that it apply in provinces that do not have their own comparable provincial carbon pricing system. Rather than scrap the provincial carbon tax, the UCP could have simply adjusted it and kept the federal tax at bay.
Now, the expectation that any provincial carbon tax be comparable to the federal tax hasn’t gone away. However, the feds have sent some pretty clear signals about what they’re willing to tolerate. Alberta could seize on this.
For example, if the federal government is unwilling to provide an exemption for natural gas for home heating, Alberta could simply do so with its own carbon tax. Ottawa is having a difficult time defending this new double standard; they’d have a pretty weak case for trying to force the hand of a province that offered similar relief to ratepayers.
Furthermore, if Ottawa is content with the price of carbon being lower in Quebec, how could it possibly object to an identical price in another province? The current rate of the federal carbon levy is $65 per tonne, but under Quebec’s system, the actual price is more like $40 per tonne. Whereas now Albertans are stuck paying the former, a made-in-Alberta levy could charge the latter.
Of course, the preference for the UCP and its supporters is no carbon tax at all. But we’ve been stuck with a carbon tax for several years now and may still be stuck with one for at least a couple more years. It’s an easy target for Alberta’s political leaders, but all those political points they’ve been racking up aren’t of much use in the real world.
It’s certainly possible that the Liberals, in full denial or ignorance of their own hypocrisy, would try to stop Alberta from following through on such a plan. But that would put the ball squarely in their court, which is the very scenario the premier has used to sell the Sovereignty Act: why challenge Ottawa in court when we can force them to take us to court?
If the next government in Ottawa chooses to scrap the federal carbon tax, Alberta could do likewise. But in the meantime, this could be a useful tool to shield Alberta from the craven whims of a flailing federal government.
“Afternoons with Rob Breakenridge” airs weekdays from 12:30 to 3 p.m. on QR Calgary