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Albertans will see gas prices jump Jan. 1 as 2020 federal carbon tax kicks in

Calgarians hit the pumps ahead of federal carbon tax implementation
WATCH: The cost of gas in Alberta will jump on Jan. 1 when the federal carbon tax kicks in. As Adam MacVicar reports, that had many people filling up ahead of the new year.

Albertans will be seeing a rise in prices at the pump this week, as the federal government’s carbon tax officially comes into effect on Jan. 1, 2020.

While drivers in the province currently pay some of the lowest gas prices in the country, they’ll be paying more as of Wednesday, experts say.

Canadians for Affordable Energy‘s Dan McTeague says he’s predicting drivers in Alberta will be paying about seven cents more per litre for gasoline, and a rise of about 8.1 cents per litre for diesel.

“Effectively what Ottawa has done, despite Albertans saying no twice, [is that] you will be treated to a seven cent kick in the pants,” McTeague said.

“As people are ushering a new year — Ottawa will be ushering a new tax.”

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‘The cost of living’

“It’s not a major concern. It’s just the cost of doing business,” Ab Storey said.

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Storey headed to his neighbourhood gas station in Calgary on Monday to fill up his family’s vehicles before the carbon tax kicks in on Wednesday.

“It’s the cost of living. What can you do?” Storey said. “You can’t do anything about it, so you pay it.”

The UCP scrapped the provincial carbon tax in June, which was implemented by the former NDP government. The UCP had promised to kill that tax as one of the party’s major election platforms.

READ MORE: Albertans will pay either provincial or federal carbon tax. Which will hurt less?

The provincial government is also currently in the midst of a court challenge against the federal carbon tax. The Alberta Court of Appeal had reserved its decision in the challenge earlier in December.

Lawyers for feds present their case at carbon tax hearing
Lawyers for feds present their case at carbon tax hearing

Ontario and Saskatchewan lost previous challenges, but are both appealing to the Supreme Court of Canada.

The federal government will issue rebates directly to Canadians to help offset the prices of the carbon tax.

READ MORE: Canada’s average carbon tax rebates are lower than the feds projected: data

In Alberta, its expected a family of four will qualify for $888 in those federal rebates in 2020, but one expert said the rebate differs between each individual household.

“If you live in an apartment, for example, or a duplex rather than a detached home or if you take public transit to work rather than drive, then your exposure to the carbon tax cost will be lower than other households but your rebate will be the same,” said Trevor Tombe, University of Calgary associate economics professor.

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“So many households will have more or a larger rebate than they will face in carbon tax costs and some households will see the reverse situation, so it really depends on your unique individual circumstances.”

Here are the rebate amounts Albertans can receive in 2020, according to the federal government:

  • $444 for a single adult of the first adult in a couple
  • $222 for the second adult in the couple, while single parents will receive this amount for their first child
  • $111 for each child in the family under 18 years old

According to the federal government, rural Albertans will receive an additional 10 per cent supplement on top of the rebate they are eligible to receive.

Ottawa’s carbon tax is set to $20 per tonne of carbon emitted into the atmosphere for 2020, rising to $30 per tonne in 2021. That tax is put forward to companies, not consumers, but prices will increase at the pump as companies attempt to make that up.

Ottawa did recently give Alberta the green light to use its own pricing system for pollution coming from big industry like oilsands, power plants and mines.

Also coming up in 2020 is a review of carbon taxes for their impact on competitiveness, which could shine some light on whether the federal carbon tax is harming the economy.

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– With files from the Canadian Press’ Mia Robson and Global News’ Adam MacVicar