The NDP government insisted Monday that the provincial economy will take only a “modest” hit from its ambitious climate strategy as it tries to head off criticism of its incoming carbon tax.
The government released a one-page report on the first day of the fall legislature sitting saying that its climate plan — which also includes a cap on greenhouse gas emissions from the oilsands and an accelerated phase-out of coal-fired power — will slow economic growth by 0.05 per cent annually, or approximately 0.4 per cent overall by 2022.
Environment Minister Shannon Phillips told reporters in Edmonton that the internal analysis by officials is essentially a worse case scenario because it doesn’t take into account benefits such as improved market access for Alberta energy, improved environmental health outcomes and economic diversification stemming from the plan.
“What it doesn’t tell you is the cost of doing nothing,” said Phillips.
The government also said that if the federal Liberal government follows through with its plan to mandate provinces to implement carbon pricing, the total reduction of GDP growth could rise to 0.5 to 0.6 per cent by 2022.
But the approval of a new oilsands pipeline to the coast — which Premier Rachel Notley has made a condition of supporting Ottawa’s plan — would lift Alberta’s economy by about one per cent over that period.
Monday’s report stands in contrast to a November, 2015 briefing by Treasury Board and Finance officials obtained by Postmedia this June that suggested the NDP’s plan would diminish economic growth by 1 to 1.5 per cent by 2022 and lead to 15,000 fewer jobs and $4 billion in lost household income over that time period.
The government said that report was inaccurate because it was based on the assumption that half the revenue from the carbon tax would go to general revenues, while the government will instead reinvest the funds into other economic activity. It also didn’t take into account mitigation measures such as planned refunds that a majority of Albertans will receive.
The government has come under heavy fire from opposition parties over the economic impact of the climate plan.
The Wildrose Opposition, along with Progressive Conservative leadership candidates Jason Kenney and Richard Starke, have vowed to scrap the NDP’s carbon tax if they take office after the 2019 election.
In question period Monday, Wildrose Leader Brian Jean said the climate plan was part of the NDP’s “radical economic agenda.”
“Their new carbon tax will kill Alberta jobs, make life more expensive for everyone and hurt our top industries,” he said.
jwood@postmedia.com
