HAUBRICH, SIMS: Finish the job, Smith. Cancel Alberta’s industrial carbon tax

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There is no such thing as a “win-win” on carbon taxes.

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When Albertans are charged a carbon tax, no matter what potential carrot Prime Minister Mark Carney dangles in front of them, it makes their lives more expensive and costs people their jobs.

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Alberta Premier Danielle Smith says she is close to a deal to finalize the memorandum of understanding with Ottawa that will impose an industrial carbon tax in Alberta.

Here’s the problem, Albertans can’t afford an ever-increasing industrial carbon tax.

Industry pushes back

And the oil and gas industry agrees.

“Things like the industrial carbon tax are things that make us uncompetitive,” said CEO of Cenovus Energy Jon McKenzie.

Canadian Natural Resources halted its planned $8-billion expansion in Alberta due to concerns over an increased carbon tax.

“Whatever structure the provincial and federal government develops, it needs to be competitive with the United States,” said Strathcona Resources executive chairman Adam Waterous.

The U.S. doesn’t impose a national carbon tax. In fact, more than 70% of countries around the world don’t have a national carbon tax.

That’s why this MOU with Carney can’t include a reformed carbon tax, a changed carbon tax or even a lower carbon tax.

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There’s no such thing as a good carbon tax.

Carbon taxes on fuel refineries make gasoline and diesel more expensive at the gas pump. Carbon taxes on utilities make home heating and electricity more expensive. And carbon taxes on fertilizer plants increase costs for Alberta farmers, making food more expensive.

When the government imposes a carbon tax on a fertilizer plant in Medicine Hat, it does not cut emissions. It chases that plant and its jobs away to North Dakota.

And when it imposes a carbon tax on an oil project in Alberta, it does not cut emissions. It pushes companies to invest in Texas instead.

An industrial carbon tax of any amount increases costs for Albertans and drives jobs south of the border.

And Smith knows this. That’s why she froze the cost of Alberta’s industrial carbon tax last year at $95 per tonne. Smith said then that increasing the carbon tax to above $100 per tonne would be “devastating” for the Alberta economy.

The previous MOU signed by Smith and Carney says the Alberta government will hike the tax to $130 per tonne.

Smith says enduring an industrial carbon tax is the only way to get a pipeline approved. That’s a reckless gamble. If the deal goes through, the carbon tax bills will follow immediately. The pipeline won’t appear for years, if ever.

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Smith should not trade the cost of a real carbon tax for a paper pipeline.

Scrap the tax

That’s why Smith needs to scrap the carbon tax altogether. And she can do it. Saskatchewan did and became the only carbon-tax free province in Canada.

Premier Scott Moe received a standing ovation from taxpayers and industry for making his province carbon tax-free.

“Today’s announcement is a significant step forward for rural Saskatchewan,” said Bill Huber, president of the Saskatchewan Association of Rural Municipalities.

“This decisive action will provide much-needed relief to Saskatchewan’s heavy civil construction industry,” said Shantel Lipp, president of the Saskatchewan Heavy Construction Association.

And Saskatchewanians overwhelmingly support Moe’s stance. Polling shows 69% of Saskatchewanians support their provincial government scrapping the industrial carbon tax.

Albertans will support it too. Albertans backed Smith because they want a premier who will stand up to Ottawa. Freezing the carbon tax was standing up. Accepting Carney’s carbon tax is the opposite.

A reformed carbon tax still makes life more expensive. A lower carbon tax still pushes jobs south of the border.

Smith does not need a “win-win” with Ottawa. She needs a win for Alberta taxpayers. That means telling Carney “no” and scrapping the industrial carbon tax in Alberta for good.

Gage Haubrich is the Prairie Director and Kris Sims is the Alberta Director for the Canadian Taxpayers Federation

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