Albertans brace for higher gas prices as carbon tax takes effect Jan. 1

After the United Conservative party routed New Democrat incumbents in April of this year, Alberta Premier Jason Kenney’s new government scrapped the provincial carbon tax as their first order of business.

This set the table for the federal carbon tax to be imposed on the province in line with the Liberal government’s policy to mandate the levy in jurisdictions without their own regime.

This federal levy will increase $10 each year until it hits $50/ton by 2022.

“Effectively what Ottawa has done, despite Albertans saying no twice, (is) you will be treated to a seven cent kick in the pants,” Dan McTeague, president of Canadians for Affordable Energy told Global News.

McTeague estimates that the carbon tax will increase gas prices in Alberta by seven cents per litre–diesel by eight cents–and cascade through the economy causing the cost of goods and services in the province to rise as well.

The provincial government is currently challenging the constitutionality of the federal levy in court and on the eve of the New Year, Alberta’s Justice minister Doug Schweitzer vowed to continue the fight.

“Albertans overwhelmingly rejected carbon taxes at the ballot box,” said Schweitzer in Calgary on Tuesday.

“While some pundits and politicians at home would prefer that we simply roll over and accept Ottawa’s unconstitutional imposition of carbon taxes on Albertans, we are steadfast in our commitment to stand up for our province.”

Similar challenges by Saskatchewan and Ontario in their provincial appeals courts have resulted in split decisions favouring Ottawa–3-2 in Saskatchewan in May; 4-1 in Ontario last June.

Either province have since taken their cases to the Supreme Court of Canada.

Meanwhile, the federal government is saying the carbon tax rebates for Alberta residents with an “average family of four” will be reimbursed $880, and couples or a single parents with one dependent are eligible for up to $666.

McTeague says there is a lot of hidden costs to the carbon tax because the cost of basic goods will go up due to the tax, making the cost of living rise.