Despite calling for its demise for years, Alberta Premier Danielle Smith says she isn’t fazed by the new prime minister’s move to kill the consumer carbon levy.
On Friday — moments after news broke that Prime Minister Mark Carney had eliminated the pricing scheme — Smith told reporters in Calgary the real test of the new federal government will be how it levies carbon pricing on industrial polluters.
“Every time I have heard the new prime minister speak, he has said that he doesn’t think [industrial]Â prices are high enough,” she said.
“I don’t think it does Alberta any good if we end up seeing massive increases to industrial carbon taxes.”
Carney issued an order-in-council Friday, ending the consumer portion of the carbon pricing program just hours after he was sworn into office.
He said people who have been getting a rebate on the carbon price will get one final payment in April — around the same time the price was to increase to $95 from $80 per tonne of greenhouse gas emissions.
Removing the consumer carbon tax was a move Carney promised during his leadership campaign, while also committing to increasing the levy charged to industrial polluters.
‘We need an election’
Alberta has had its own version of an industrial carbon tax in place for more than a decade, and Smith said it was unclear if an increase under the federal program would simply add to the provincial levy.
Smith said that uncertainty, and Carney’s commitment to bolstering industrial pollution levies, is why she wants to see an election called immediately.
“That’s why we need an election — to get some clarity on just how badly he’s going to punish the oil and gas sector and what that new industrial pricing scheme he talked about during the leadership race is going to look like,” she said.
For years Smith, and her United Conservative predecessor Jason Kenney, said Ottawa’s carbon pricing program was to blame for cost-of-living issues across the country, especially in Alberta.
In 2019, when Jason Kenney was premier, Alberta took Ottawa to court over the pricing scheme seeking it be declared unconstitutional, but the Supreme Court ruled in the federal government’s favour in 2021.
Last fall Smith’s government announced it was taking Ottawa to court over the carbon tax again, but this time over an exemption given to those who use home heating oil, largely in the Atlantic provinces.
“The federal carbon tax has always been unfair, but the selective way it’s being applied now is also unconstitutional, and the impacts on Albertans will only get worse as the costs continue to increase,” Smith said at the time.
Smith had also previously called on Ottawa to give an exemption for farmers using propane to dry grain and natural gas to heat barns.
Saskatchewan Premier Scott Moe did not immediately respond to a request for comment on the levy ending but has also called on the federal government to scrap it, saying the levy has made life more expensive and harms businesses.
In 2021, Moe’s Saskatchewan Party government also took Ottawa to the Supreme Court challenging the price but losing in a ruling that deemed the levy was constitutional.
Just after being sworn in, Prime Minister Mark Carney killed the unpopular consumer carbon tax and sent a strong message to the U.S. that Canada will defend its sovereignty in the face of U.S. tariffs and President Donald Trump’s repeated threats to make it the 51st state.
Last year, Saskatchewan stopped remitting levies to Ottawa on natural gas after the Liberal government under former prime minister Justin Trudeau had exempted home-heating oil users from paying.
Ottawa and Saskatchewan then reached an agreement securing the federal government half of what was owed until the dispute is resolved.
Opposition NDP Leader Carla Beck welcomed the end of the carbon levy Friday, saying in a statement: “Great. Finally.”
Eliminating the consumer charge will reduce the cost of a litre of gasoline by 17.6 cents, and reduce the cost a cubic metre of natural gas by a little more than 15 cents.
