January 6, 2017 8:07 pm
Updated: January 6, 2017 9:20 pm

Lloydminster businesses say Alberta carbon tax creates uneven playing field

WATCH ABOVE: Lloydminster is split across the Alberta-Saskatchewan border, with different tax rates and rules on each side. With the Alberta carbon tax now in effect, businesses on the Alberta side fear they're at a disadvantage. Tom Vernon reports.

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Lloydminster has always been a bit of a unique community. The city straddles the Alberta-Saskatchewan border, which means homes and businesses across the street from each other on Meridian Avenue are in different provinces, and face different tax rates.

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For years, this favoured businesses on the Alberta side of the border. The province has no sales tax, and fuel taxes were traditionally lower. To ensure competitive fairness, the Saskatchewan government made exceptions. Gas retailers were given tax rebates, and the province stopped charging the sales tax on most items.

With the introduction of the Alberta carbon tax on Jan. 1, the tide began to turn. Albertans are now paying higher taxes at the pumps, on their natural gas bills, and if they burn coal, the cost has nearly doubled.

“We’ll be burning coal as long as winter lasts,” said Greg Jones, the general manager of Trans Canada Automatic Truck Wash on the western edge of Lloydminster.

READ MORE: Alberta coal customers stock up ahead of carbon tax

The company uses a coal burner to heat the building. Coal currently costs about $42 per tonne to purchase, the carbon levy now adds more than $35 on top of that.

“If it’s a long winter, if it’s an exceptionally cold winter, that could be $5,000 to $10,000 additional dollars.”

The company is facing a further $2,000 hike on its natural gas bill.

READ MORE: Drivers can do these 5 things to conserve fuel amid Alberta’s carbon tax

For most businesses across Alberta, a potential solution is to pass the additional cost to their customers. It isn’t that simple for Jones.

“All of our truck washing competition is on the other side of the border.”

It’s this type of imbalance that has the Lloydminster Chamber of Commerce asking the province to make an exception for the community.

“We’re not asking for an advantage, we’re asking for support to create an equal playing field so our businesses don’t suffer,” said Rob Saunders, a political action committee member with the chamber.

In mid-December, chamber president Kevin Kraft sent a letter to the provincial politicians outlining concerns about how the new tax will impact gasoline retailers.

“Unless an exemption is provided to ensure Alberta carbon levy does not apply to gas stations within the city’s limits, a vigorous and viable class of business will be lost unduly and unfairly,” states the letter.

READ MORE: Alberta carbon tax kicks in: ‘It’s already here, we can’t do anything about it’

Prices in the city have been largely comparable on both sides of the border during the first week, but the additional tax burden on the Alberta side would mean retailers are facing a thinner profit margin.

The chamber has asked the NDP to instead follow the federal carbon tax plan, which begins in 2018, and would impact both sides of the city equally.

When pressed on these concerns, the government was quick to point out low and middle-income Albertans will be receiving rebate payments, and it has taken steps to reduce the burden for small businesses.

“We will continue to work to understand the full implications of the carbon levy on border communities,” Finance Minister Joe Ceci said through a statement to Global News.

“Small businesses in Lloydminster, and across Alberta, will benefit from the small business tax cut implemented as part of the Climate Leadership Plan.”

READ MORE: Alberta begins issuing carbon tax rebates to families

The tax cut is cold comfort to Greg Jones at the Trans Canada Automatic Truck Wash.

“It’s a pittance. It’s a slap in the face. They’ve raised our costs $12,000, and we might get $1,000 back.”

He now has to find a way to recoup the remaining cost.

© 2017 Global News, a division of Corus Entertainment Inc.

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