Friday, March 06, 2020

A quick primer on Alberta's carbon tax (or not)

If you have had problems understanding Alberta's position viz-à-viz carbon taxes, you're probably not alone. I, for one, couldn't figure it out, but then I often have difficulty figuring out things that happen in Alberta...
Anyway, I finally managed to track down a document that adequately explains it (courtesy of accounting firm PriceWaterhouseCoopers, as it happens), and now I think I more or less understand. Sort of.
Alberta used to have a perfectly good carbon tax system, called the Carbon Competitiveness Incentive Regulation (CCIR), under Rachel Notley's NDP government. When Jason Kenney's Conservatives took over in April 2019, pretty much the first thing they did was, predictably enough, cancel it. So, then they didn't have any carbon tax, and so the federal "backstop" carbon tax clicked in, which Kenney obviously didn't like.
He therefore instituted his own carbon tax, called the Technology Innovation and Emissions Reduction (TIER) system (because heaven forbid it be called a carbon tax!), which only applies to greenhouse gas emitters exceeding a 100 kilotonne CO2 annual threshold, and which is pegged to the levels of the federal carbon tax. Unlike the old carbon tax, there is no income tax rebate to individuals; it is a straight tax retained by the provincial government, some of which is to be put towards carbon reduction schemes in the province (maybe).
However, because TIER does not apply to all companies, the federal backstop tax applies to those smaller emitters not already covered by TIER, thus necessitating two completely separate accounting systems, and unnecessarily complicating the whole exercise.
So, what then is the point of having  the TIER system? Ah, I've not been able to pin that down, I'm afraid. Because ... well, because Alberta.

No comments: