Opinion Editorial – A New Kind of Carbon Tax

A new kind of carbon tax for Alberta

According to Ipsos Reid, a majority of Albertans are against the new carbon tax. For far too long, politicians have been talking about “putting a price on carbon” with very little meaning behind those words. To the NDP’s credit, they have now provided Albertans with a definition of what the price means.

We have seen estimates of what the carbon tax may cost the average family ($470 by 2018 according to most reports) but I doubt that most people truly comprehend the wide-ranging effects. Most won’t give it a thought until the tax takes effect at the pump.

Consider the impacts on our food supply – farmers will pay carbon tax on the fuel they use in their trucks, combines and other equipment; grain handlers and meat processors will pay it on their operations (don’t forget the packaging that uses fossil fuels); truckers will pay extra on all the transportation; grocery stores will pay extra for their operations; we will pay more to get to and from that store. This is a tax that will impact everyone heavily and the estimated $470 is mainly just talking about household natural gas and gasoline.

Consider also that our municipalities will pay the carbon tax. Police, Fire, EMS, snow clearing operations, natural gas to heat our schools, costs for everything will go up. Calgary Mayor Nenshi says, “Our fuel costs will certainly go up, so as they reallocate some of the money from the carbon price back to people who can’t afford it, I hope they remember to allocate some of that back to the city.” In other words, property taxes are also going to go up, probably significantly.

You are likely asking yourself, what’s the point? The stock answer is that if Albertans want to fight global warming, then we must do our part to reduce emissions. The government is taking the approach that if they raise the price of fuel, we will reduce our usage. There certainly is logic in that, however, the effect will be extraordinarily punishing particularly to families and low-income Albertans.

However, those of us with families will struggle to reduce our emissions. We drive our kids to hockey practice, piano lessons or maybe to school. Many people take transit already; we see our trains are packed every morning and night. Also consider that if you live or farm in rural Alberta, can you really exchange your 4×4 F350 for a Prius? The Prius may not be quite up to the job and the result will be that savings are going to be very hard to come by.

Industrial operations will have more success in reducing operations. Companies will have to invest billions in their operations and they can likely reduce emissions somewhat. The environmental NGOs see that investment as an economic “opportunity” – the shuttering of coal plants will lead our government to encourage “green” jobs in renewable electricity options.

Is this a new utopia for Alberta? Not likely. The down side is that a study in Spain showed that for every ‘green’ job that was created, two were lost. In addition, when companies are scrambling to save every cent as we suffer through low commodity prices, is it responsible to force non-productive spending? Jobs will continue to be lost if that happens and investment will continue to flee. To top it off, Alberta will not even see reductions in CO2 from electricity generation as without a phase out plan, plants that can operate will keep going but ratepayers will see our hard-earned cash get transferred out of province instead of the companies that are working to build our province.

Perhaps the most important question is – what will be the net effect of all of this tax? Will we save the world from global warming if we shut our coal plants and limit oil sands? No, we will not. The oil sands accounts for “less than 0.15 per cent of global emissions” (Alberta Energy). As well, over 40 per cent of our electricity comes from coal generation, so that is going to be an extraordinarily expensive transition (just ask Ontarians).

Make no mistake, Albertans and Canadians are all willing to do their part in reducing overall emissions but this carbon tax is about more than CO2. It is about our government enforcing lifestyle changes upon us and it is a wealth transfer with no real benefit to Albertans.

The Environment Minister mused recently that this could be a temporary tax but Canadians have heard that before, starting with income tax ahead of the First World War. If you have an opinion on this tax, now is the time to make your voice heard.

Randy Kerr is the Executive Director of the Canadian Natural Resource Alliance.