Alberta Premier Danielle Smith is raising concerns about Prime Minister Mark Carney’s carbon reduction policies, saying that increasing the industrial carbon tax to offset the removal of the consumer carbon tax would have negative economic impacts on the province.
Smith made the comments on March 14, the same day Carney signed a directive to reduce the consumer carbon tax rate to zero, shortly after being sworn in as Canada’s prime minister.
During the Liberal leadership campaign, Carney proposed replacing the consumer carbon tax with incentives for greener choices, pledging to shift more of the cost onto “big polluters.” However, the specifics of his carbon reduction policies have yet to be fully outlined.
“We are gravely concerned that plans to significantly increase the industrial carbon tax will be just as damaging to Alberta’s economy as the consumer carbon tax has been,” Smith wrote in a March 14 statement.
“I think that the prime minister has made his views very clear about keeping oil and gas in the ground,” Smith said in an unrelated press conference earlier in the day.
Smith said Carney, who has advocated for climate change policies and decarbonization, would replace the “transparent” consumer carbon tax by “increasing the hidden tax which is the industrial pricing.”
Related Stories
She said it wouldn’t benefit Alberta “if we end up seeing massive increases to industrial carbon taxes.”
She noted her province has had industrial carbon pricing since 2007. “It’s unclear to me if he intends to layer on top of what we were already doing, or what that price is going to look like,” she said.
On a March 15 episode of her phone-in radio show “Your Province, Your Premier,” Smith said increased industrial carbon taxes would raise costs for businesses, many of which would struggle to stay afloat. “Somebody just sent me a bill of $45,000 of which 18,000 was the carbon tax,” she said.
“There is only so far that you can go in charging these taxes.”
Carney said during the leadership campaign that the consumer carbon tax was too “divisive” and that Canadians were bearing the costs of large industrial emitters. He said his climate policy would reward Canadians for making sustainable choices, such as buying electric vehicles and energy-efficient appliances, while “big polluters” would foot the bill to support these efforts.
Conservative Leader Pierre Poilievre responded to Carney’s carbon tax directive by saying he would fully remove both the consumer and industrial carbon taxes. He told a March 17 press conference that a Conservative government would use “technology, not taxes” to reduce emissions.
The Conservatives have strongly opposed the carbon tax, saying it makes the cost of living more expensive. They have argued that shifting costs to businesses will ultimately affect consumers, as those costs are likely to be passed down.
Responding to whether he would consider dropping the industrial carbon tax in the context of trade tensions with the United States, Carney on March 17 defended his climate policy, saying that having a carbon pricing system is a requirement for diversifying Canada’s economy to Europe, the United Kingdom, and “emerging Asia.”
Alberta’s Smith and Saskatchewan Premier Scott Moe have both called on Ottawa to remove the carbon tax. On the same day Carney took office, Moe wrote him a letter outlining his province’s priorities, including eliminating the carbon tax “in all its forms off everything for everyone.”
Moe said that although his government stopped collecting and remitting the carbon tax on home heating in 2023, Ottawa is still trying to collect the levy from the provincial government.
Alberta, along with Saskatchewan and Ontario, challenged the constitutionality of the carbon tax, but the Supreme Court of Canada ruled in 2021 that the levy was constitutional.
Premier Smith, whose government is currently challenging the constitutionality of Ottawa’s carbon tax exemption for heating oil, said the carbon levy is not Alberta’s only “grievance” with Ottawa.
In her March 14 statement, she said Carney has not yet condemned other “harmful policies” from Ottawa including the proposed emissions cap, the plastics ban, and firearms bans.
“We will continue to stand up for our industries, push back against policies that unfairly target Alberta, and fight for a fair deal within Confederation,” Smith said.
Matthew Horwood contributed to this report.
