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Alberta Ottawa plans to impose levy after Kenney tables legislation to kill Alberta’s carbon tax

Alberta Premier Jason Kenney speaks to reporters after appearing at the Standing Senate Committee on Energy, the Environment and Natural Resources in Ottawa on May 2, 2019. Mr. Kenney has said he would repeal the provincial carbon tax and instead focus his government’s efforts on large emitters.

Justin Tang/The Canadian Press

Ottawa plans to move quickly to impose a carbon tax on Albertans once Premier Jason Kenney kills the province’s own tax as part of his government’s wider attack on federal environmental policies.

Mr. Kenney, who made eliminating Alberta’s carbon tax a central pillar of the United Conservative Party platform in the recent election, will table legislation next week that will end the provincial levy on May 30. That will open up the province to the federal backstop, a replacement levy that took effect last month in Manitoba, Saskatchewan, Ontario and New Brunswick.

Federal Environment Minister Catherine McKenna has already made it clear the backstop would apply in Alberta if Mr. Kenney proceeds with his plan to repeal the province’s carbon tax.

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“Once a decision is taken to implement the federal system, we will move as quickly as possible in order to minimize a gap in coverage,” Sabrina Kim, press secretary for Ms. McKenna, wrote in an e-mail Tuesday.

Ms. Kim declined to say precisely how soon that would happen. Her e-mail said that the federal government assesses provincial and territorial systems annually and also evaluates major changes as they happen.

Earlier in the day, Ms. McKenna defended the federal plan and accused Mr. Kenney and Ontario Premier Doug Ford, who has launched a government-funded advertising campaign against the tax, of “misleading” the public about carbon pricing.

“We have said there will be a price on pollution across the country," she told reporters before a cabinet meeting in Ottawa. "Alberta needs to be part of any climate plan.”

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The previous, NDP government in Alberta introduced a carbon tax that took effect in 2017 and raises $1.4-billion a year, which has been spent on rebates, transit, renewable energy and other green projects. The tax is currently $30 a tonne.

The federal backstop is $20 a tonne this year and will increase by $10 a year until it hits $50 by 2022. Taxpayers in the four provinces covered by the federal levy are receiving rebates – prepayments to cover the coming year – through their income tax filings this year. Ms. Kim said the process to claim rebates would be the same for any other province where the backstop is applied.

Mr. Kenney has said he would repeal the provincial carbon tax and instead focus his government’s efforts on large emitters, who would nonetheless see their costs decrease to $20 a tonne.

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Christine Myatt, Mr. Kenney’s press secretary, said in an e-mail that the UCP government believes its levy on large industrial emitters, which will be used to fund programs designed to reduce greenhouse gas emissions, will be more effective for the environment and more fair to Albertans than a carbon tax.

“We do not believe that punishing everyday Alberta families for heating their homes and driving to work is a viable approach to emissions reduction, which is why we promised to scrap the carbon tax in last month’s provincial election campaign,” wrote Ms. Myatt.

The Premier said this week that his government is still deciding whether to file a court challenge of the tax or simply intervene in cases already under way in Saskatchewan and Ontario. The Court of Appeal for Saskatchewan issued a 3-2 ruling this month that upheld the federal tax, and Ontario’s Appeal Court is preparing its own ruling; both are expected to end up at the Supreme Court of Canada.

Mr. Kenney has also promised legal challenges of Bill C-69, which would overhaul environmental approvals for pipelines and other resource projects, and Bill C-48, which would ban tankers off British Columbia’s northern coast.

Stewart Elgie, who teaches law and economics at the University of Ottawa and represented the Ecofiscal Commission in the Saskatchewan case, said Alberta’s tax on large emitters would not insulate the province from the federal backstop. He said any emissions taxed under Alberta’s system would be exempt from the federal levy but consumers and other sectors would be covered, as is the case in Saskatchewan.

“The goal of the federal carbon price is to fill gaps – where a province has not put a price on carbon, then the federal backstop will come in," Prof. Elgie said.

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“If you only apply a carbon price to industry, then industry has to do all the work to meet Alberta’s targets.”

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