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Editorial: Carbon taxes for all

June 13, 2017 – The federal government recently announced that it is implementing a federal carbon tax starting at $10 per metric tonne of GHG emissions in 2018, which will increase by $10 per metric tonne every year until hitting the $50 per metric tonne mark in 2022.

The carbon tax will come into effect in any provinces that do not have a carbon tax in place by 2018. This currently includes Manitoba, New Brunswick, P.E.I., Newfoundland and Labrador, Nova Scotia and Saskatchewan – much to Premier Brad Wall’s dismay, I’m sure.

British Columbia has had a carbon tax in place since 2008 (currently at $30 per metric tonne of greenhouse gas emissions); while Alberta implemented its carbon tax in January 2017 ($20 per metric tonne of GHG emissions, with it increasing to $30 per metric tonne in 2018).

Ontario implemented a cap and trade system this year and performed its first cap and trade auction this past March. Quebec has a similar cap and trade system in place (Nova Scotia is currently considering this type of system but does not have a provincial system in place, as of yet).

To better understand the potential impact of the federal carbon tax plan, I touched base with tax expert Mitch LaBuick, partner, Indirect Tax at BDO Canada in Edmonton to learn more about how this new tax will affect businesses and individuals.

LaBuick has 25 years of experience working with indirect tax, including 10 years with the Canada Revenue Agency, and is an expert in carbon taxes and fuel taxes, among other tax-related issues. LaBuick says whether the federal government or a provincial government uses a straight carbon tax per tonne or a cap and trade system, one thing is abundantly clear: the cost of fossil fuels is going to go up for everyone.

He said that in 2018, a $10 per metric tonne of GHG dollar equivalent in a litre of gas would be 2.33 cents per litre, going up to 11.63 cents per litre at $50 per metric tonne. He added that diesel fuel will go up 2.74 cents at the $10 per metric tonne of GHG, increasing by 13.69 cents by 2022 at the $50 level; and that marketable natural gas (based on cubic metres) is expected to increase 1.96 cents per cubic metre at $10 per metric tonne, going up to 9.79 cents at $50 per metric tonne.

If you’re a fleet manager or owner in a road construction or aggregates production business, this probably isn’t the news you want to hear.

So how do individuals and businesses try and combat absorbing additional costs from their province’s carbon tax?

LaBuick says the answer is to take advantage of as many carbon tax-fuelled rebates as possible.

In Alberta, for example, the carbon tax is supposed to be revenue neutral, with every dollar re-invested to fund rebates for low-income individuals; as well as rebates for things like energy-efficient lighting, heat pumps and hot water systems to help businesses, hospitals and schools reduce their carbon footprints.

To offer our readers an opportunity to learn more about the impacts and opportunities around federal and provincial carbon taxes, Rock to Road has set up a special online Q&A with tax expert Mitch LaBuick on September 26.  

To learn more about this unique opporuntiy to get all of your carbon-related questions answered, visit  www.rocktoroad.com.

In the meantime, if you’d like to learn a little more about reducing your fleet’s idling times, turn to page 8 and see how a Kingston, Ont.-based contractor extinguished its fleet’s idling issues.