Alberta Premier Danielle Smith asks for extension of carbon tax exemption

After Prime Minister Justin Trudeau announced this week the carbon tax would be exempt for three years on home heating oil, Premier Danielle Smith responds saying Ottawa’s exemption decision fails to address affordability needs in Alberta.

Premier Smith says the exemption should also be applied to natural gas, as the majority of Alberta uses it to heat their homes. Smith says she’s disturbed by the measure, adding it further creates a divide in the country. 

Professor of Economics at the University of Calgary, Trevor Tombe, says recently the provincial governments proposed their own carbon pricing plans that offered exempting home heating oil, but it was rejected by the feds.

“Only now just a few months after overriding the provinces and loving their own carbon price,” he said. “It’s now backtracked on that and I think it’s potentially done some real damage to the federal government’s signature policy and can inflame regional tensions, especially here in Alberta and elsewhere that already have concerns around the federal policy.”

Tombe says this move by the Trudeau government largely helps those in Atlantic provinces as it’s the primary source for home heating there.

Talking to CityNews, one Calgarian said, “Tax rebate on oil makes zero sense because 90 percent of Canadian households heat with natural gas or wood burning.”

Yet, Trudeau says people in other provinces are to also benefit from the exemption. 

Economist Moshe Lander says this exemption undoes the basic purpose of implementing the carbon tax in the first place.

“But if you’re worried about the environment, this is not good. And the broader issue to me is that if you can suspend it on heating oil, then at what point does somebody come along and say, ‘Well, what about this particular fuel of choice?,'” he said. “And so are we going to start seeing that we now see an undoing of the carbon tax which is meant to address climate change?”

And Tombe agrees.

“At first, it makes the carbon tax a less effective policy, if many individuals and now probably rightly expect it to be weaker in the future,” he said. “Second, by increasing the incentive of many others to seek out their own exemptions, this might very well be the start of unwinding the entire system of national carbon pricing.”

Reacting to this announcement, Alberta’s opposition NDP leader Rachel Notley says “to apply a carbon price to only some regions and some fuels is totally unacceptable. Earlier this morning I gave notice to the Speaker of the Alberta Legislature that we will bring an emergency motion to call for any federal actions to be applied equitably across all Canadians, regardless of their location or home heating method. I hope the UCP will join us in supporting this motion unanimously.”