Alberta’s carbon levy will be implemented in less than three months, but exactly how the new tax will affect the average Albertan is anyone’s guess.
The Canadian Taxpayers Federation estimated that the carbon tax will cost families $600 a year by 2018, but Spruce Grove-St. Albert MLA Trevor Horne isn’t so sure.
“With the current projections it is kind of hard to give a definitive projection until it kicks in,” he told the Gazette editorial board recently.
St. Albert MLA Marie Renaud told the Gazette that people are concerned about the carbon tax, but the impact is unknown because the cost will depend on the choices you make.
“I get hammered a lot on taxes. I think people just focus on ‘oh carbon tax, carbon tax, oh my god, it’s going to cost a fortune.’ Well I don’t think we actually know and I think it very much will be driven by decisions you make on a day-to-day basis.”
It’s disconcerting that in less than three months the government will be rolling out a significant tax that will affect every industry and its own MLAs aren’t totally sure of the repercussions on the average taxpayer.
The government does provide an estimated impact of the levy – putting it at between $6 and $8.75 per month per household – but neither NDP MLA cited those numbers when queried by the Gazette.
Because the province’s economy is intrinsically connected to oil, there is always going to be some uncertainty, but the carbon levy is an added level of uncertainty at a time when the economy is already lagging. The bad news for Albertans is that uncertainty is the enemy of investment. In times when the economy is struggling, businesses stick with what they know and right now, there is a lot of unknowns when it comes to Alberta’s carbon levy.
Businesses have information about how the levy will affect the price of all fuels, but what they don’t know is how suppliers may choose to change their prices in accordance with the added cost. They also don’t know how consumers will change their spending habits once the tax is implemented.
In the current economic climate, many Albertans are watching their spending more than normal. Many are without jobs and living on a tight budget, but they aren’t being given a clear picture of how the carbon levy will affect them.
The government has committed to provide rebates for some, but any individuals earning more than $55,000 annually will not qualify for rebates. Depending on the number of children, families with two income earners will not qualify for rebates after $100,000 to $103,000 of combined income. These individuals and families will still have to pay more to drive their cars and heat their homes, but they will now have less spending money and won’t be getting a rebate to offset the cost. For an extra 4.49 cent per litre at the pumps, it’s also uncertain if Albertans will drive less or simply absorb the cost.
Regardless of whether one agrees that the carbon tax will decrease emissions, it is clear that costs will increase Jan. 1, 2017. What is not clear is what the impact this will have on Albertans, businesses and potential investment. That uncertainty isn't doing anything to help the economy.
