As of Jan. 1, Stettler and area residents will join millions of Albertans in paying the new carbon tax.
The tax, which costs $20 per tonne of carbon dioxide emissions, will affect Albertans as the cost of fuel – diesel and gasoline – as well as natural gas will increase. Prices are anticipated to rise elsewhere as these costs filter down to the consumer.
The carbon tax, this year, will add 4.49 cents to the cost of a litre of gasoline, 5.35 centson diesel, and 3.08 cents on propane, according to documents prepared by the Government of Alberta. Natural gas will increase 1.011 cents per gigajoule (GJ). Despite the added tax to fuels, the prices of gasoline and diesel have remained relatively on par with prices before New Year’s, with the exception of a brief surge on Sunday, Jan. 1.
Purple gas is exempt, so farmers won’t see an increase in the cost of their diesel. Additionally, the province has said it will create programs valued at about $10 million to help farmers decrease their emissions and save on costs with upgrades.
This brings Alberta’s carbon tax laws in line with those of neighbouring British Columbia.
According to the provincial government, the rate is based on the carbon dioxide emissions of fuel when they are combusted, rather than the amount of fuel itself.
On average, the tax is estimated per year to cost $191 for a single adult, $259 for a couple, and $338 for a couple with two children. Indirect costs, such as rising prices of produce or other consumer items, is expected to be about $50-$70 per year, according to the government.
Electricity is exempt from the carbon tax, even if generated at a coal-fired plant.
According to government documents, about 60 per cent of Albertans should receive a rebate; single Stettlerites earning less than $47,500, and couples and families earning $95,000 or less, should earn a full rebate, while some individuals and families earning slightly more than that will earn partial rebates.
The full rebate is $200 for an adult, $100 for a spouse and $30 for each child under 18, up to four children.
While some businesses, like greenhouses, have managed to earn exemptions, that is the exception, not the rule. Small business taxes were decreased from three per cent to two per cent, which should help offset the cost of the tax.
There’s also no special rebate program for municipalities, and residents of the Town of Stettler are likely to see tax increases this year as the town factors the rising costs into its budget.
According to Assistant CAO Steven Gerlitz, the increase has been factored into the town’s interim budget. In 2017, the town expects to pay roughly $30,000 in carbon taxes, costs incurred through heating bills (natural gas) and fueling its fleet of machines and vehicles.
The County of Stettler, like the town, will be impacted by the carbon taxes. According to Assistant CAO Yvette Cassidy, the initial estimate of the financial impact of the carbon tax on the County of Stettler’s 2017 proposed budget was as follows.
The utility costs of natural gas will be $4,500 per annum, while fuel such as diesel at 5.35 cents/litre would be $10,575.03 per annum, with gas being 4.49 cents/litre amounting to $7,406.82 per annum, altogether resulting in $22,481.85.
“We had been led to believe by our provincial government that marked fuel would be exempt from carbon tax,” Cassidy said. “Last week however, we were informed that marked fuel will not be exempt, which in turn greatly affects our initial estimates of how the carbon tax affects our county budget.”
Cassidy now estimates the impact of the carbon tax on the county will be costing approximately $45,000 per year.