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'Next Phase' Of Albertan Carbon Pricing Enters Into Effect

by Mike Godfrey, Tax-News.com, Washington

03 January 2018


Alberta's carbon levy has increased from CAD20 (USD16) per tonne of CO2 emissions to CAD30, effective January 1, 2018.

Alberta's carbon levy entered into force on January 1, 2017, at an initial rate of 20 per tonne of CO2 emissions. A CAD10 increase scheduled for January 1, 2018, has now entered into effect.

The levy is charged on all fuels that emit greenhouse gases when combusted. The rate is based on the amount of carbon pollution released by the fuel when it is combusted.

The Government said that revenue from the levy will continue to be invested in the province, through green infrastructure, energy efficiency, renewable energy, bioenergy, and innovation.

The Government also estimates that 60 percent of households will receive a full or partial carbon levy rebate in 2018. It said that a single adult earning up to CAD47,500 a year will receive a rebate of CAD300, while a couple earning up to CAD95,000 a year will receive a rebate of CAD450. Parents that qualify for the rebate will receive up to an additional CAD45 per child, up to a maximum of four children.

To be eligible for a rebate, Albertans must file their 2016 and subsequent income tax returns. The rebate is non-taxable and also refundable, meaning that Albertans will receive it even if they pay no provincial income taxes.

The Government said that, even with the increase in the carbon levy, Alberta has an overall tax advantage over Canada's other provinces, as it has no provincial sales tax, health premium, or payroll tax. It added that individuals and business will still pay at least CAD8.7bn less in total taxes and carbon charges than if Alberta had the same tax and carbon pricing systems as other provinces.

Environment Minister Shannon Phillips said: "Our government is committed to leading policy development, not taking direction from Ottawa. Our made-in-Alberta Climate Leadership Plan works for Albertans and Alberta's economy."

"Since 2015, our plan has supported mortgage-paying jobs, built an entirely new and long overdue energy efficiency industry, and put a meaningful dent in emissions reductions. We will continue to protect Alberta's health, wealth, and growth in 2018."

In December 2016, the federal Government and all but two provinces and territories agreed to the Pan-Canadian Framework on Clean Growth and Climate Change. Under this framework, a federal carbon pricing option will apply in provinces that do not have their own pricing system in place in 2018.

TAGS: individuals | tax | business | sales tax | pollution tax | energy | payroll | tax rates | carbon tax | Canada | tax reform

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