Alberta carbon tax prompts fierce competitiveness debate

Concern the province’s energy industry is shouldering a burden its competitors are not.

June 9, 2016   by Dan Healing

CALGARY — The impact of Alberta’s new carbon levy on the oil and gas industry was hotly debated in Calgary on June 8, a day after it was passed by the NDP government.

Alberta Energy Minister Marg McCuaig-Boyd, who spoke at an industry conference, insisted the province can compete with neighbouring Saskatchewan, which doesn’t have a carbon tax.

“We’re still pretty competitive overall in Canada,” said McCuaig-Boyd. “We’re one of the lowest (tax) jurisdictions and, I always have to remind people, we don’t have a provincial sales tax.

But Gary Leach, president of the Explorers and Producers Association of Canada, said the carbon tax could drive investment away to other provinces or the United States.

“We’re competing in a North American market,” he said. “The price for our energy exports is set outside of Alberta. We don’t set the prices. So to the extent where our industry is shouldering a competitive burden that our competitors are not, that is a serious concern.”

Beverly Gilbert, national commodity tax leader for law firm Borden Ladner Gervais, said there’s no question that Alberta producers will face higher costs and a “huge compliance burden” as a result of the carbon tax.

“They will be paying this non-refundable tax that people in Saskatchewan will not be paying, for instance, on things like venting and flaring,” Gilbert said. “That makes us less competitive.”

Gilbert acknowledged, however, that the fact that Alberta has no provincial sales tax gives it a substantial advantage that producers in other provinces don’t have.

The carbon levy, to take effect Jan. 1, is one element of a climate-change strategy intended to reduce Alberta’s carbon footprint. It is expected to bring in $3 billion in 2017-18.

Cenovus Energy spokesman Brett Harris said his company has supported Alberta’s climate change initiative from the start and would like to see it extended across North America so there’s a “level playing field” for all competitors.

“We think over the long term it actually gives Alberta a potential competitive advantage because it establishes us as a world leader, especially in terms of oil-producing jurisdictions,” he said.

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1 Comment » for Alberta carbon tax prompts fierce competitiveness debate
  1. Randy says:

    Still don’t see taxes as a vehicle to removing C02. Taxes are what I call lazy government policy designed to create revenue for governments with spending problems and coruption problems. (Example of coruption see Liberal party of Canada, and Ontario) Taxes burdens the consumer with higher costs driving the price of everything up. The cost of food will rise just for production followed by transportation to market, followed by higher costs of maintaining the market of which all is passed on to the the consumer. Not one gram of C02 is removed. In the end the consumer will have less money in their pockets which means less money flowing in the economy which in turn drives down growth. At the same time the consumer will have to choose between feeding their families and heating their homes all so we can put more money in to the pockets of government. The worst managers when it comes to our money. And we still have not removed one gram of C02. All this policy does is enrich corrupt governments and their freinds.

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