The federal carbon tax: Are Albertans right, or wrong?

Emission discussion: Jason Kenney speaks at the Scrap the Carbon Tax Rally at the BMO Centre on Oct. 5, 2018. The Scrap the Carbon Tax Rally was an event organized by the United Conservative Party, prior to its election as the provincial government in 2019. (Photo by Braeden Park/The Press)

The beginning of 2020 has left many Albertans questioning the jump in gas prices at the pumps, but the extent to which this increased initial cost will directly affect people is still being debated.

Trevor Tombe, graduate program director of the economics program at the University of Calgary, says the ultimate goal of the carbon tax is to “lower emissions by giving an incentive for people to change behaviour.”

The tax has been set at $20 per tonne of carbon emissions, increasing to $30 per tonne come April and $50 per tonne in 2022.

However, in addition to being taxed on the use of non-renewable energy, Albertans will also receive rebates on their taxes paid, which Tombe said will often have a positive effect for many households.

“What makes the federal tax very different is that the government isn’t spending any of the revenue, it’s taking every dollar and sending it back to Albertans in a cash transfer.”

Tombe said anyone who files their taxes will be able to receive this transfer.

That doesn’t make sense to some Albertans, however.

“This is insanity, this is where a carbon tax is nothing more than lipstick on a pig,” said Jeff Dyck, a Calgarian and vice-president of a local wealth planning company.

“What is the point of a rebate when the desire is to change behaviour? When a rebate is instituted and money is returned, behaviour is not changed,” Dyck said.

He said Calgary is a resource-based city in a resource-based province, and that the tax will mean reduced employment, reduced foreign investment, and an increase in the number of companies leaving Alberta.

This is insanity, this is where a carbon tax is nothing more than lipstick on a pig. — Jeff Dyck

Dyck said he would like someone to clearly demonstrate that the carbon tax is having the meaningful impact on behaviour that it is intended to have in contributing to global carbon reductions.

“From the studies I’ve read, it isn’t, and won’t, ever,” said Dyck.

Malcolm Klager, who lives on a farm just north of Calgary, he said his family wouldn’t have noticed the carbon tax if it weren’t for the increase in gas prices. The cost is adding up as a result of all the driving they do in, around, to, and from the farm.

Tombe said the biggest difference in how the federal carbon tax will affect Albertans’ household budgets is where people live, in the cities, or in rural areas.

The inexpensive prices for many oil-based products, while convenient, are unsustainable. —Malcolm Klager

“Fuel use tends to be bigger in rural areas. If you’re in Calgary, take transit, and live in an apartment, you are not going to use very much fuel,” Tombe said.

However, Klager said he thinks the price increases are necessary to achieve the country’s environmental goals.

“The inexpensive prices for many oil-based products, while convenient, are unsustainable,” he said.

Klager said he thinks renewable energy should be pursued to the “maximum extent feasible,” no matter how much Albertans are “stuck in their ways.”

“I believe Albertans think the carbon tax will affect Alberta more than other provinces, but Alberta isn’t the only resource-rich province being taxed, so it shouldn’t act like it,” he said.

Klager said the pros of the carbon tax include environmental awareness and positive changes in action from big oil companies in response to being taxed.

“By making such an influential energy-based province more environmentally aware, I believe it will lead others by example in making similar changes and making the country more environmentally conscious as a whole,” he said.

Dyck said that the tax will not modify his behaviour, as it is not something that has a meaningful impact on his own life. He believes that most people feel this way and will act accordingly.

“We are perceived, rightly or wrongly, as the rebellious west. Our reactions are more extreme as our economy is resource-based,” said Dyck.

“In both good times and bad, Alberta is still one of the strongest economic contributors to federation.

“When times are good, other provinces are on the take. When things are bad, the help doesn’t arrive. I’m glad we have leadership in Alberta that is calling the federal government’s bluff on this issue,” he said.