In fact, only about 30% of the revenue collected will be returned to taxpayers through consumer rebates to low-income earners and small business tax cuts. The remaining 70% will be used to further increase government spending on programs and projects, and coal buy-outs.
Rather than heed the advice of the expert Climate Change Advisory Panel and offset the impacts of carbon policy on households, the government has opted to only protect 60% of households. While we commend the government for providing support to lower- and middle-income Albertans, 40% of Albertans will be worse off under this regime.
Explicitly, 40% of households will be asked to pay $500 more per year in 2017, and $900 more per year in 2018.
Help needed for Albertan households
Any price on carbon should be fully refunded to taxpayers, as Canadians for Clean Prosperity advocated for in our proposal to government. Under our plan, every household in Alberta would see a $500 credit to help offset the growing costs caused by the carbon tax. Albertans would have the freedom to choose how best to spend this credit — whether to improve their household’s emissions footprint through purchasing high efficiency appliances, light bulbs, solar panels and lowering their future carbon tax bill or spending the money to help purchase every day consumer goods.
Some good news for small businesses
There was some good news for Alberta’s small businesses in Budget 2016, as these job creators will have their tax rate reduced from 3% to 2% beginning in 2017, as called for in our proposal. Businesses can use these savings to expand and hire new employees, helping put people back to work, or invest in energy saving measures.
However, the Budget missed an opportunity to make Alberta a more attractive place to invest, despite the carbon tax. We called on the government to pursue broad based corporate tax cuts to assist industry in attracting more capital investment. Reforming Alberta’s tax system to be more efficient could stimulate the economy almost immediately, and applies to all sectors, not just those the government of the day deems worthy. Whereas spending programs, even “green” ones, only benefit targeted sectors, and may take months or years to have any impact.
Any price on carbon should be fully refunded to taxpayers, in order to stimulate economic growth, compensate taxpayers and businesses, and empower ratepayers to make the financial investments necessary to mitigate their future costs. While we commend the government for implementing a carbon tax, a necessary tool to shift consumer behaviour, and to help gain market acceptance for our energy products, the implementation plan represents a missed opportunity to increase the competitiveness of our economy and protect households.
*These calculations do not include the allocation of the roughly $3B dedicated to output-based rebates to large emitters. This money is expected to be collected from industry and then directly rebated back to leading companies, according to industry-wide performance benchmarks.