Changes in Alberta’s Carbon Tax now in effect

The Alberta Legislature building.

The Alberta Legislature building in Edmonton, Alberta. — Photo courtesy Google Maps

As of January 1, 2018, Alberta’s carbon tax increase has come into effect. Previously at $20 per tonne of carbon-dioxide emissions, the tax has been raised to $30 per tonne of emission. According to the Alberta Government, the policy change is meant to “encourage Albertans to reduce carbon pollution from their cars and homes” and “provide a financial incentive for families, businesses and communities to become more energy efficient and move away from higher-emission fuels.”

As with the last carbon tax, Albertans can expect to face higher prices on fuels and other goods. But how can we expect to pay extra at the pumps? What other costs will rise? And where will all that money go?

The carbon tax on gasoline will increase from 4.49 cents per litre to 6.73 cents per litre. For a litre of diesel, it will rise from 5.35 cents to 8.03 cents. The price of propane has also increased by about 1.5 cents per litre and for those of us that heat our homes with natural gas prices will increase by about 50 cents per gigajoule (GJ). Prices of less common fuels, such as kerosene, locomotive diesel, and coal, will also be affected.

While the new policy will not impact the chequebooks of all Albertans equally, the Alberta Government has estimated the rise in costs will cost an average family of four about $500 for the year. They have also said it will cost a single person about $290 and a couple about $390 per year.

Some exemptions to the tax still apply, however. Electricity for homes and farm fuels remain unaffected. For some Albertans Tax rebates are also still are in effect. A single adult with an income less than $47,500 per year will receive a tax rebate of $300. A couple in a household earning less than $95,000 per year will receive a rebate of $450. A couple in a household of two children earning less than $95,000 per year will receive a rebate of $540. Also, parents that qualify for the rebate will receive up to an additional $45 per child (to a maximum of four). According to the government, any Albertan that as filed their yearly income tax returns since 2016 is eligible to receive the rebate without any application process. Rebates will be mailed directly to your home address.

As part of the Climate Leadership Plan, the government has promised that all revenue from the levy will be reinvested in Alberta’s economy. Specifically, revenue will be spent on tax rebates, efforts to reduce emissions, renewable energy projects like green infrastructure, and research and innovation.

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