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The first legislative business of a United Conservative Party (UPC) government if elected will be ‘Bill 1: The Carbon Tax Repeal Act.’
• This Bill will abolish the existing $30 per tonne carbon Tax.
• It will be paid for in part by about a $1.1 billion reduction in the operating spending of the NDP’s so-called Climate Leadership Plan, reduced corporate welfare and other spending in the “pipeline” from the NDP government including $3.7 billion in planned rail car purchases.
• Eliminate the $1.4 billion carbon tax with the introduction of Bill 1, The Carbon Tax Repeal Act
• Eliminate $1.1 billion in spending from the Carbon Tax.
This leaves a $300 million difference between revenue and expenditures. These are capital grants We will move these capital grants into the Government of Alberta capital planning budget and prioritize as necessary. Priority capital projects will continue to be funded out of standard infrastructure budgets and as part of an ongoing capital plan. It should be noted that there is not a separate Carbon Tax Budget as the NDP claims. All carbon tax revenues go into the government’s General Revenue Fund, and are spent based on votes in the Legislature. Eliminating the Carbon Tax therefore has no effect on any particular government expenditure.
By passing ‘Bill 1: The Carbon Tax Repeal Act’ the UCP will:
1) Take an important step towards creating 6,000 new jobs.
2) Help Albertans pay their bills.
3) Proactively release information about the carbon tax, withheld from Albertans by the NDP.
- Challenge the constitutionality of the Trudeau carbon tax by filing a judicial reference to the Court of Appeal, while continuing to support similar challenges by the governments of Saskatchewan and Ontario.
- Subject any future carbon tax to the Alberta Taxpayer Protection Act which requires all sales taxes to be voted on in a referendum.
- Release detailed assessments of the impact of the carbon tax and the NDP’s “Climate Leadership Plan” on Alberta’s economy, and on key sectors including electricity, oil and gas, and homes.
- Share an impact report with Albertans of the costs of adopting Justin Trudeau and the NDP’s plan for a $50/tonne carbon tax.
1) Create 6,000 new jobs:
The UCP commissioned the economic consulting firm Stokes Economics to calculate how many new jobs will be created in Alberta as a result of eliminating the carbon tax and not moving it to $50/tonne.
Stokes estimates that removing the $1.4 billion burden from Alberta’s taxpayers will create over 6,000 new jobs in 2024, including over 1,400 in the manufacturing sector, over 1,200 in the trades sector, and nearly 1,000 in transportation and warehousing.
Other the key results from Stokes Economics:
• Alberta nominal GDP will be $962 million higher;
• Alberta real GDP will be $1.27 billion higher;
• Consumer expenditures will be $269 million higher;
• Plant and equipment investment will be $352 million higher;
• Real total industry investment will be $418 million higher; and
• Retail sales will be $1.9 billion higher in 2024.
As an example of the potential for job creation, one Slave Lake saw mill pays nearly $500,000 in carbon taxes ever year, not including extra carbon tax costs for log-hauling.1 That equals 10 jobs at $50,000 each that could be created when that mill stops sending carbon tax cheques to government.
2) Helping Albertans pay their bills
Relief for single Albertans
Even after existing carbon tax rebates are ended, here is who will be better off every year. Based on Budget 2018 estimates, the UCP calculate that at $50,000 in income:
• A single Albertan will save $286
• A single Albertan with one child will save $346
• A single Albertan with two children will save $405
• A single Albertan with three or more children will save $524
Relief for seventy percent of middle income-earners
According to data from economists Trevor Tombe and Jennifer Winter at the University of Calgary, most middle-income earners will be better off after the elimination of the carbon tax.
• 290,000 middle-income Alberta families, or nearly 70% of Alberta families earning between $60,000 and $120,000, will receive tax cuts ranging from $25 and $1,150 under our proposal to eliminate the NDP carbon tax
• In total, 725,000 Alberta families, 60% of Alberta families, will receive tax cuts ranging between $25 and $1,150 under our proposal to eliminate the NDP carbon tax.
Relief for small and medium-size business will average $4,500 annually
The average small and medium-sized business in Alberta consumes an estimated 1,500 gigajoules of natural gas per year. We estimate that such businesses pay $2,276 per year in gross carbon taxes for natural gas.
The average small and medium-sized business in Alberta consumes an estimated 32,689 litres of gasoline and diesel per year. We estimate that business pays $2,200 per year in gross carbon taxes for gasoline and diesel.
That’s almost $4,500 annually in carbon tax costs for every small or medium-size business.
3) Proactive document release
A UCP government would proactively release comprehensive assessments of:
• The macroeconomic impact of the carbon tax and the Climate Leadership Plan on Alberta’s economy, and on key sectors including electricity, oil and gas sectors, and homes.
• The macroeconomic impact of Alberta adopting Prime Minister Trudeau’s $50 per tonne carbon tax.
The now-hidden consultants’ reports already prepared on the Climate Leadership Plan for the Alberta Climate Change Office, Alberta Energy and Alberta Treasury Board and Alberta Finance.
4) Sue the federal government if it imposes its carbon tax on Alberta.
• Should the federal government seek to impose its own carbon tax on Alberta, a UCP government will make an application for a judicial reference to the Alberta Court of Appeal.
• In this respect, the UCP is already defending Alberta as an intervenor supporting the judicial references of the governments of Saskatchewan and Ontario challenging the constitutionality of the federal carbon tax.
The United Conservative Party asked Stokes Economics (the same firm that costed the UCP balanced budget) to estimate the economic benefit of eliminating the carbon tax versus a $50 carbon tax by 2024.
The results include higher nominal and real GDP, an increase in plant and equipment investment, 6,000 more jobs and $1.9 billion more in retail sales as of 2024.
Calgary Chamber of Commerce: “Alberta’s carbon levy is imposing thousands of dollars of costs on Calgary’s small and medium-sized businesses.” (Calgary Chamber report, “The layered costs of government policy,” Dec. 14, 2017).
CFIB: “Business owners report that the carbon tax has led to increased operating and input costs, reduced profitability, and the delay of business investments.” (Business in Edmonton, Mar. 1, 2018)
Alberta Chambers of Commerce: Vote Prosperity report (November 2018)
• Corporate tax increases along with the provincial carbon [tax] and costlier environmental regulations have resulted in weak job growth,layoffs, and the highest unemployment rate outside of Atlantic Canada. One estimate indicates the carbon [tax] increased costs on restaurants and hospitality businesses by over $36,000 annually and new labour regulations could cost an additional $11,000 on a single statutory holiday.”
• “73% of businesses indicated their costs will increase due to the carbon levy, while only 21% of those businesses believe they will be able raise their prices to compensate.”
In their 2015 platform, the NDP never mentioned their plan to impose a $1.4 billion carbon tax on consumers, businesses, other governments and agencies and non-profits.
Alberta’s carbon tax was announced by the NDP government in 2016, as part of its so-called Climate Leadership Plan. Launched in 2017 and initially based on a carbon price of $20/tonne, the rate was increased 1 January 2018 to reflect a carbon price of $30/tonne.2 The NDP government’s assumption is that its carbon tax would follow the $50 per tonne by 2022 pricing path established by its ally, Prime Minister Justin Trudeau, though it has temporarily halted plans to raise the tax higher until a new pipeline is actually built.3
Carbon taxes are raised on hydrocarbon fuels used for home heating and transportation. Albertans can track those increases if they care to from gas receipts and utility bills. Less obvious are the extra costs incurred indirectly through purchases of goods and foods moved by rail or truck.
• When first collected in 2017, gasoline carried a 4.49 cents/litre carbon tax. On 1 January 2018, this rose to 6.73 cents/litre.
• When introduced in 2017, diesel carried a 5.35 cents/litre carbon tax. On 1 January 2018, this rose to 8.03 cents/litre.
• When introduced in 2017, natural gas carried a $1.011 carbon tax. On 1 January 2018, this rose to $1.517/gigajoule.
• When introduced in 2017, propane carried a 3.08 cents/litre carbon tax. On 1 January 2018, this rose to 4.62 cents/litre.
• Farm fuels are exempt, as is electricity. All other fuels are taxed, including aviation fuel, locomotive diesel and coal.
Presently, the NDP’s Carbon Sales Tax takes $1.4 billion from Albertans annually at the rate of $30/tonne. When taken at the rate of $50/tonne—should the NDP be re-elected and follow through with their original plan—the carbon sales tax will cost Albertans Albertans about $2.5 billion. (See below.)
However, in the long run, the tax could be much higher. Premier Notley told the National Post4) “We have never outlined that $30 was where it was going to stop. People who talk about effective carbon pricing acknowledge that, as time progresses, it needs to go up.” Also Environment Minister Shannon Phillips: “Our carbon price increases will track with the federal legislation that will be in place at that time. We’ve been clear about that from Day 1.”5) It should be noted that in their 2018 budget, the NDP revealed that as they increase the rate by 67 percent, there will be no additional ‘green’ spending, and no increase in the rebates.6
The federal government also anticipates ongoing hikes:
• A 2017 Department of Finance memo contemplated increases beyond $50/tonne:7) “The overall approach is to be reviewed by 2022 (referred to as the ‘five-year review’) to confirm the path forward, including continued increases in stringency in future years.”
• Also, a secret memorandum from Environment Canada estimates that for Canada to meet its climate targets, the carbon tax would need to be $300/tonnein 2050.8)
1) Calgary Board of Education
Paid $3.3 million in carbon taxes in 2017 the extra $300,000 imposed on the transportation budget forced the school board to take five buses off the roads.9
2) Vanderwell Contractors (Slake Lake)
This saw mill in Slave Lake paid nearly $500,000 in carbon taxes last year and an additional $200,000 in long haul costs for the carbon tax.1
3) Sundre Seniors Centre
Increased utility costs left the Sundre Seniors centre $1,000 short and almost forced its closure.10
4) Calgary Food Bank
The Calgary Food Bank estimated it would pay over $35,000 in extra costs in 2018 due to the carbon tax.11 That’s an extra job or one’s month’s worth of food for 147 families helped by the food bank.
5) Municipal taxes to carbon tax
The NDP’s carbon tax cost High Prairie and Big Lakes County taxpayers an extra $27,000 in municipal taxes in 2017.12
The NDP carbon tax is effectively a provincial sales tax on energy, which drives up the cost of everything.
The NDP’s carbon tax is therefore a violation of the spirit of the 2002 Alberta Taxpayers’ Protection Act, which requires a referendum before a sales tax can be introduced. The NDP neither held a referendum, nor even campaigned on carbon taxes in 2015. A UCP government would amend the Taxpayers’ Protection Act to require a referendum before a carbon tax could be reintroduced in the future.
Liberal Environment Minister Catherine McKenna: “I negotiated that [National Climate] plan, and I can tell you with 100% certainty that without a government…a Rachel Notley government who said ‘we’re having a price on pollution, we’re going to have a hard cap on emissions from the oil sands, and we’re going to phase out coal,’ that we wouldn’t have national plan right now.” (Catherine McKenna, C-69 announcement, Feb. 8, 2018)
NDP Environment Minister Shannon Phillips: “Our carbon price increases will track with the federal legislation that will be in place at that time. We’ve been clear about that from Day 1.” (Calgary Herald, Dec. 15, 2017).
Premier Notley: “We have never outlined that $30 was where it was going to stop. People who talk about effective carbon pricing acknowledge that, as time progresses, it needs to go up.” (National Post, Nov. 30, 2016)
$20/tonne carbon tax on gasoline: 4.49 ¢/L
$30/tonne carbon tax on gasoline: 6.73 ¢/L
$40/tonne carbon tax on gasoline: 8.98 ¢/L
$50/tonne carbon tax on gasoline: 11.22 ¢/L
- (National Post, Nov. 30, 2016
- (Calgary Herald, Dec. 15, 2017
- “Beginning in 2021, additional revenue resulting from the federally imposed carbon price tied to the construction of the Trans Mountain Pipeline will be used to support vital public services as the province stays on track to balance the budget by 2023.” Page 4, https://open.alberta.ca/dataset/8beb5614-43ff-4c01-8d3b-f1057c24c50b/resource/fb6e444b-2514-43f6-9f99-cf200d2fd165/download/budget-2018-budget-address.pdf.
- (Feb. 24, 2017
- (National Post, Mar. 30, 2017