News

Alberta Carbon Levy and Rebate Update

Effective January 1, 2018 the carbon levy rose from $20/tonne to $30/tonne. The carbon levy is applied to diesel, gasoline, natural gas and propane at the gas station and on heating bills. While the tax does not apply directly to electricity, it is important to note that natural gas is an important raw material used for electric power generation in Alberta. The levy rate is based on the amount of carbon pollution that is released by the fuel, not the mass of fuel itself. The following table shows the new rate in comparison to 2017.

Type of Fuel

2017 rate

($20/tonne)

Rate increased

Jan. 1, 2018

2018 rate

($30/tonne)

Marked farm fuels

Exempt

Exempt

Exempt

Diesel

5.35₵/L

+2.68₵/L

8.03₵/L

Gasoline

4.49₵/L

+2.24₵/L

6.73₵/L

Natural Gas

1.011 $/GJ

+0.506 $/GJ

1.517 $/GJ

Propane

3.08₵/L

+1.54₵/L

4.62₵/L

Source: Alberta Government https://www.alberta.ca/climate-carbon-pricing.aspx#toc-9

The Alberta Government states the purpose of the carbon levy as “providing a financial incentive for families, businesses and communities to become more energy efficient and move away from higher-emission fuels”. The money realized from the tax is to be used in, “efforts to reduce emissions, rebates for Albertans to offset cost increases, and in research and innovation” (Alberta Government, https://www.alberta.ca/climate-carbon-pricing.aspx#toc-9 )

To mitigate some of the financial repercussions, many Albertans and their families are eligible for rebates. The NDP said about 60 per cent of Alberta families are eligible for a full or partial carbon tax rebate. For example, 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 $450 and 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).

Eligible Albertans do not have to apply to receive the rebate, but they must file their 2016 and subsequent income tax returns to be eligible. To find the estimated cost of the carbon levy for your household and the rebate you will receive, visit the government website: https://www.alberta.ca/calculate-carbon-levy-rebate-and-costs.aspx

Leave A Comment