+ RMA Rural Municipalities
of Alberta

Resolution 2-16F

Exemption of Municipalities from Carbon Levy

November 16, 2016
Expiry Date:
December 1, 2019
Active Status:
Leduc County
3 - Pembina River
Vote Results:

WHEREAS the Climate Leadership Implementation Act (the “Act”) of Alberta received Royal Assent June 13, 2016; and

WHEREAS the purpose of the Act is to implement a carbon levy (“tax”) on consumers of fuel throughout the fuel supply chain effective January 1, 2017; and

WHEREAS most fuel consumers, including municipalities, will be required to pay the carbon levy, unless an exemption is granted under regulation; and

WHEREAS Alberta municipalities provide vital services to their communities and have limited revenue streams to provide these services; and

WHEREAS the carbon levy would significantly increase costs to Alberta municipalities both directly and indirectly which would require municipalities to increase property taxes, reduce services or increase user fees (or some combination of these); and

WHEREAS Section 79(1) of the Act allows the Lieutenant Governor in Council to pass a regulation exempting a consumer or group of consumers from the carbon levy;

Operative Clause:

THEREFORE, BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties request the Government of Alberta to exempt all municipalities in Alberta from the carbon levy.

Member Background:

On January 1, 2017, the Climate Leadership Act will come into effect.  The purpose of this Act is to implement a carbon levy (“tax”) on consumers of fuel throughout the fuel supply chain.  This levy will be placed on nearly all forms of fuel, to most consumers, with few exceptions.  As it currently stands, this will have a significant adverse financial impact on municipalities both directly through the purchase of fuels including gasoline, diesel, natural gas and propane, as well as indirectly in anticipated higher costs for goods and services purchased from vendors that are subject to pay this same levy and are required to increase their rates and fees to recover these costs.

As municipalities’ revenue streams are limited, the direct and indirect additional costs to municipalities of this levy will have to be covered through increases in taxation, charging higher user fees, or through reduction in service levels (or likely some combination of these).  While the intent of the legislation, in part, may be for consumers to reduce usage of fossil fuels, there is limited opportunity for municipalities to do this as a large portion of the fuels used by municipalities is in the delivery of core services.

The carbon levy rates will “ramp-up” as the rates from 2017 will be increased by an additional 50% in 2018 and remain at this level.  The rates are as follows:


Type of Fuel January 1, 2017 January 1, 2018
Diesel 5.35 ¢/L 8.03 ¢/L
Gasoline 4.49 ¢/L 6.73 ¢/L
Natural Gas 1.011 $/GJ 1.517 $/GJ
Propane 3.08 ¢/L 4.62 ¢/L

Section 79(1) of the Act allows the Lieutenant Governor in Council to pass regulations to exempt individuals and classes of consumers (such as municipalities) from the carbon levy.  Such an exemption for municipalities is what is being sought from the Honourable Minister of Environment and Parks.

RMA Background:

RMA has no active resolutions directly related to this issue.

Government Response:

Environment and Parks (Climate Change Office): The Government of Alberta (GOA) does not intend to provide carbon levy exemptions for municipalities.

Alberta’s carbon levy will help Alberta do its part to combat climate change, strengthen and diversify our economy, and create new, diverse, good paying jobs in our communities. Alberta is a province full of innovators and entrepreneurs and Albertans will find ways to reduce emissions and grow the economy.

Alberta’s Climate Leadership Plan sets aside over $2 billion in green infrastructure funding over five years that will be invested in Alberta communities.

$7 million in carbon revenues have already been made available specifically to help municipalities improve building energy efficiency and solar energy through the Municipal Climate Change Action Centre.

The GOA is also taking steps to ensure that municipalities have access to even more energy efficiency programing with the creation of Energy Efficiency Alberta. This will support the good work of many municipalities who are already taking steps to be more efficient and lower their emissions. It will also help municipalities lower their overall utility costs.

In their report released in January 2017, the energy efficiency panel recommended that government work closely with municipalities to build on existing municipal initiatives.

The GOA recognizes the vital importance of municipal services provided by members of Alberta Association of Municipal Districts and Counties, and will continue to evaluate opportunities to partner with municipalities on relevant, mutually beneficial initiatives.


The Government of Alberta response indicates that municipalities will not be provided an exemption from the carbon levy. Although RMA appreciates the Government of Alberta’s willingness to collaborate with municipalities to ensure that programs provided through Energy Efficiency Alberta and other bodies provide benefits to municipalities, there is still a concern that imposing the levy on municipalities will force an increase in municipal taxes and fees to maintain levels of service. RMA’s Climate Change Advisory Committee supported the need for a municipal exemption from the carbon levy, and as such, this resolution is assigned a status of Intent Not Met.

In 2018, the Government of Alberta announced a $54 million grant to the Municipal Climate Change Action Centre to assist municipalities in climate change mitigation and adaptation programs and strategies.

Provincial Ministries:
Environment and Parks,
Municipal Affairs,
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