As the NDP government prepares to release details of its incoming carbon tax in Thursday’s provincial budget, the debate around the planned levy is already well underway.
The Notley government announced last fall that it would implement on Jan. 1, 2017, an economy-wide carbon tax equivalent to $20 per tonne of CO2 emissions — increasing to $30 in 2018 — that will raise prices on gasoline, electricity and home heating costs.
The price on carbon provides an incentive for reducing emissions, while money collected from the tax will be used for investments in clean energy research, public transit and energy efficiency, as well as to offset costs for low and middle-income earners.
On Wednesday, the Pembina Institute environmental think-tank released a paper saying that with the rebate system in place, many Albertans could ultimately come out ahead.
The report written by Sara Hastings-Simon noted that Alberta’s climate panel recommended households be given a rebate to cover the “average” cost of the carbon levy.
“If consumers reduce their emissions — turn down the heat when no one is home, choose more fuel efficient cars, use public transit, walk, bike, take advantage of coming energy efficiency programs — they can reduce their ‘actual’ cost below the ‘average,’” she said.
“Add to that the direct savings from using less energy and you get extra cash in your pocket.”
A new report from the University of Calgary’s School of Public Policy meanwhile calls the carbon tax a positive move, but takes aim at the government’s suggestion it is “revenue-neutral” because money raised will be put into the economy and not go into the province’s general revenues.
The paper by Kenneth McKenzie argues instead that the carbon tax should be truly revenue-neutral in that its proceeds should be used to lower existing corporate and personal income taxes.
