Carbon Levy Keeps Diversifying Alberta’s Economy

As part of the government’s made-in-Alberta Climate Leadership Plan to diversify the economy, create jobs and reduce emissions, the next phase of the carbon levy comes into effect today.

The carbon levy is increasing to $30 per tonne from $20 per tonne of carbon dioxide emissions. Revenue from the levy will continue to be invested in Alberta through green infrastructure, energy efficiency, renewable energy, bioenergy and innovation.

In 2017, funds from the Climate Leadership Plan were used to protect and improve the things that make a difference in the lives of Albertans, including badly needed LRT lines in both Calgary and Edmonton. Last year the province committed up to $1.53 billion for phase one of the Calgary Green Line LRT. Support was also committed for Edmonton’s LRT future expansion. Both projects will create thousands of jobs, reduce emissions and keep Albertans moving.

Thanks to the province’s investment in Energy Efficiency Alberta, homeowners and businesses have saved more than $300 million through rebates on energy-efficient products (like programmable thermostats), home improvements (like tankless water heaters), and solar installations. All of these programs were developed to help reduce emissions and energy bills.

“Our government is committed to leading policy development, not taking policy direction from Ottawa. Our made-in-Alberta Climate Leadership Plan works for Albertans and Alberta’s economy. Since 2015, our plan has supported mortgage-paying jobs, built an entirely new and long overdue energy efficiency industry, and put a meaningful dent in emissions reductions. We will continue to protect Alberta’s health, wealth and growth in 2018.”

~Shannon Phillips, Minister of Environment and Parks and Minister responsible for the Climate Change Office

In addition, $13 million has supported programs and projects, like grants for Indigenous communities, LED lighting for health facilities and highways, and solar installations for community buildings. The Alberta government also reduced the small business tax rate, which will save business owners an estimated $175 million in 2017-18.

Government also recently announced $1.4 billion for innovation projects, funded by the Climate Leadership Plan, which include:

  • $440 million for oil sands innovation.
  • $225 million for research into new technologies that reduce emissions.
  • $240 million for industrial energy efficiency projects that help companies save money while upgrading equipment or facilities to lower energy use.
  • $63 million in grants for bioenergy projects including biodiesel and ethanol.
  • $400 million in loan guarantees to support investment in efficiency and renewable energy.

To help offset the costs of the carbon levy, rebates for low- and middle-income Albertans are also increasing this year. The carbon levy rebate is estimated to give about $310 million back to Alberta households in 2017-18.

Even with the increase in carbon pricing, Alberta continues to have an overall tax advantage compared to other provinces, with no provincial sales tax, health premium or payroll tax. Albertans and Alberta businesses will still pay at least $8.7 billion less in total taxes and carbon charges than if Alberta had the same tax system and carbon pricing as other provinces.

Quick facts

  • In 2018, 60 per cent of households are expected to receive a full or partial carbon levy rebate.
  • A single adult earning up to $47,500 per year will receive a rebate of $300.
  • A couple earning up to $95,000 per year will receive a rebate of $450.
  • A couple with two children earning up to $95,000 per year will receive a rebate of $540.
  • Parents that qualify for the rebate will receive up to an additional $45 per child (to a maximum of four).
  • Albertans do not have to apply to receive the rebate, but must file their 2016 and subsequent income tax returns to be eligible.
  • The rebate is non-taxable and also refundable, meaning Albertans will receive it even if they pay no provincial income taxes.
  • Questions about an individual’s or household’s rebate or eligibility may be directed to the Canada Revenue Agency (CRA), which is administering the program on the province’s behalf: 1-800-959-2809.