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

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WATCH ABOVE: The beginning of the new year also marked the beginning of a new era in Alberta as the government's carbon levy took effect. The controversial tax aimed at addressing climate change and diversifying the economy has been met with both applause and disgust. Julia Wong reports.

After months of heated political debate, the Notley government’s carbon levy took effect across Alberta on Sunday.

The levy will be charged on all fuels that emit greenhouse gases when combusted at a rate of $20 per tonne in 2017 and $30 per tonne in 2018.

That will result in gas shooting up by 4.5 cents per litre across Alberta beginning Sunday. Diesel is set to increase by 5.4 cents per litre and natural gas will climb more than $1 per gigajoule.

READ MORE:  Drivers line up for gas ahead of Alberta’s looming carbon tax

As of Sunday, the cost of a litre of gas jumped by about five cents at most Edmonton gas stations and the levy received mixed reaction from drivers fuelling up.

“We’re in an unsustainable province,” Ryan McKinley said. “We have to have one (carbon levy), we have to change what we do.”

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“You’re trying to change something that’s happened for the last 50 years. Of course everyone is going to stand up and say ‘No,’ because it’s going to come out of their pockets. But we have no choice, we have to change our infrastructure.”

Jim Finnigan was buying gas at the same station but had an alternative viewpoint on the new tax.

“We live in northern Alberta, we drive in six-inch ruts in our neighbourhood – we’re not going to get a Honda Civic so no, it’s not going to change anything.”

The province has said revenue from the carbon levy will be reinvested into Alberta to reduce emissions and support economic diversification.

Some politicians have argued the carbon tax will prove to be a major blow to small businesses but John Williams, owner of the Blue Plate Diner in downtown Edmonton, said he doesn’t agree.

“It’s such a knee-jerk reaction,” he said. “I don’t think all the information has been presented to the small business community.”

“If this increase is going to tank your business, then your business wasn’t on very solid footing to begin with.”

Williams said he hopes to address the rising cost of doing business by reducing how much he drives to go shopping for his restaurant and how many deliveries he receives from suppliers.

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“That’s always at the very bottom of my plan is raising prices and passing increase onto the customers.”

While Williams suggested business owners need to simply accept their new fiscal reality, the owner of an Old Strathcona eatery said he believed introducing the levy during the current economic downturn was a mistake.

“The economy is already very depressed, this is probably one of our slowest years on record and I think introducing any kind of additional tax right now is going to hurt the economy,” Artisan Resto-Cafe owner Saiyed Jaffer said, adding he doesn’t see how he can increase prices to adjust to the tax as he recently did so in response to the rising minimum wage.

“Not to take anything away from the environmental impact, if it can be effective the amount of emissions we make here, that would be great. But I just think with the economy right now, it’s bad timing because of all the other increases we’re facing right now.”

“These dollars will also fund investment in green infrastructure, energy efficiency, renewable energy, bioenergy and innovation,” the province said in a media release Saturday.

The province estimates the average family will pay $443 more in 2017 due to the tax. Opposition politicians say they believe the cost will be at least double that.

Low to middle-income Albertans will get a rebate on the carbon tax.

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READ MORE: How will Alberta’s carbon tax impact consumers? 

Watch below: On Nov. 23, 2015, Vinesh Pratap filed this report on what consumers can expect from Alberta’s carbon tax.

“I think it’s ridiculous,” Finnigan said. “I think it’s the most ridiculous thing to do. Other countries like Australia have had it and they’re going away from it now. We live in a northern climate, we’re not going to turn our furnace down, we’re not going to switch cars.”

Deputy Premier Sarah Hoffman reiterated the importance of the carbon tax on Sunday, saying Alberta only received approval for the Trans Mountain and Line 3 pipeline projects because of the tax.

READ MORE: Justin Trudeau halts Northern Gateway, approves Kinder Morgan expansion, Line 3

“Make no mistake, our climate leadership plan is the reason Alberta is breaking the land lock,” Hoffman said during a press conference at the legislature.
“It’s a way for me to remind myself of the long game here.”

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Hoffman also slammed the approaches taken by previous governments on climate change.

“Some are arguing we should scrap the plan and go back to the old ways of doing business. What would that accomplish? Turning back the clock on climate leadership will put on hold, and put Alberta backwards, because we wouldn’t be able to get the pipelines that were approved in November,” she said.

“It’s the best way to protect the environment, protect jobs and get pipelines built. Those are three goals that are important to every Albertans,”
She also said the extra cost at the pump is worth it.

WATCH: Alberta, Ontario drivers see effect of carbon tax at gas pumps

Click to play video 'Alberta, Ontario drivers see effect of carbon tax at gas pumps' Alberta, Ontario drivers see effect of carbon tax at gas pumps
Alberta, Ontario drivers see effect of carbon tax at gas pumps

“It’s four-and-a-half cents that we’re paying. I think four-and-a-half cents is a price I’m willing to pay if that means we have economic diversification. We’re sick of seeing the boom and bust cycles of the past government over and over again,” Hoffman said.

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However, she admitted not every Albertan will change their routines.

“We’ll see that in some areas it does change consumer behaviour but in other areas, it’s about having that revenue to be focused on things like energy retrofit programs.”

When asked why the government did not wait to implement the carbon tax until it had finessed details over programs to be launched in the spring, Hoffman said the province needed to act and she pressed opposition parties to calm down.

“Most of the people who are pushing that ‘wait until you get everything right’ are the people who don’t want us to see any action on climate leadership. They don’t want us to move forward on diversifying the economic and, to be frank, I don’t think they even want us to get pipelines because they care more about this government failing than about Albertans benefiting from all the opportunities that exist,” she said.

READ MORE: Wildrose votes to fight to repeal Alberta’s carbon tax

“I’m calling on the Official Opposition to put down their sword.”

Wildrose Leader Brian Jean said in an emailed statement Sunday that the price of everything is rising at a time when Albertans need a break.

“The vast majority of Albertans do not support this carbon tax, no matter how much money the NDP waste on ads promoting it or how many ministers they send out to spin a job-killing tax,” Jean said.

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Environment Minister Shannon Phillips is scheduled to speak to reporters on Monday to provide more details on the levy and levy rebates.

“It’s already here,” Williams said. “We can’t do anything about it.”

Alberta isn’t the only province where climate change policies were expected to impact prices starting on New Year’s Day – Ontario’s cap and trade program to curb carbon emissions also kicked in.

-With files from Caley Ramsay, Laurel Gregory and The Canadian Press.