The federal carbon tax will be applied to fuel starting April 1, and is expected to add 4.6 cents per litre to the price of gasoline. By itself, it’s not a huge amount, but for the City of Regina that cost adds up quickly.
The city estimates the carbon price will result in $1 million in added costs for the 2019-20 fiscal year.
“The million dollars is based on what we expect the direct cost impacts will be. That’ll be gasoline and diesel used in city vehicles and heavy equipment, as well as electricity and natural gas costs,” Barry Lacey, the city’s executive director of financial strategy and sustainability, explained.
These are just estimates, as Lacey said the city does not yet have hard data to examine. The city’s finance department will be monitoring costs associated with the carbon tax throughout the year.
Lacey added that people should not see a property tax impact associated with the tax this year because the mill rate increase was already determined for 2019.
The city will make adjustments for the carbon tax in the 2020 budget, if necessary.
“It is like any other uncontrollable price increase. The city faces price increases from time to time from its suppliers, so it is from our perspective like any other uncontrollable price increase that we need to manage,” Lacey said.
“Any funding from the federal government to offset that certainly would be appreciated.”
The federal government does have a support fund set up for provinces that will have the federal price imposed.
“Part of the proceeds from carbon pricing will be set aside, specifically to alleviate the burdens on those who would not be able to pass their cost along in the normal marketplace. Municipalities are one of those,” Federal Public Safety Minister Ralph Goodale said Thursday.
Saskatchewan is expected to receive $150 million over the next five years with $15 million coming this year based on federal finance ministry data.
This money is intended to help municipalities, school, universities, hospitals, non-profits, volunteer organizations and Indigenous communities address costs associated with the federal carbon tax.
However, it is not yet known how exactly this federal fund will be divided amongst the relevant parties.
This part of the reason is why the Saskatchewan government did not account for the carbon tax in their recent budget.
Saskatchewan Finance Minister Donna Harpauer said most of the expected provincial costs from the carbon tax will come from schools and hospitals, buildings expected to be exempt from the carbon tax.
Global News reached out to Environment and Climate Change Canada on when more details about this fund may be made available but did not receive a reply as of this publication.
Lacey said the City of Regina is looking forward to hearing more details on this program but has little information at this point.