WHEREAS the Greenhouse Gas Pollution Pricing Act (the Act) received Royal Assent and came into force on June 21, 2018; and

WHEREAS the Act is commonly referred to as the “carbon tax”; and

WHEREAS the Government of Alberta challenged the constitutionality of the carbon tax to the Supreme Court of Canada (SCC), and the SCC determined the carbon tax to be constitutional; and

WHEREAS the 2016 Pan-Canadian Framework on Clean Growth and Climate Change: Canada’s Plan to Address Climate Change and Grow the Economy recognized the need to avoid carbon pricing that creates a disproportionate burden on vulnerable groups and Indigenous peoples; and

WHEREAS Alberta’s Court of Appeal recognized in its decision in Reference re Greenhouse Gas Pollution Pricing Act, 2020 ABCA 74 that the Act does not take into account regional differences in terms of inclemency of weather, longer travel distances for work and transport of goods, and the sparseness of population (which leads to incrementally higher costs for transportation); and

WHEREAS rural Albertans need to heat their homes during the long winter months and therefore cannot freely choose to reduce their carbon footprint in this way; and

WHEREAS rural Albertans do not have access to public transportation comparable to Albertans in urban centers, and therefore are forced to pay higher taxes by using more fuel to travel; and

WHEREAS the carbon tax rate will rise to $50 per ton by April 2022 and will continue to rise $15 per ton every April until reaching $170 by 2030; and

WHEREAS utility costs are becoming disproportionately unaffordable for rural residents as compared to urban residents in Alberta due to a myriad of factors, including the carbon tax; and

WHEREAS no federal, provincial, or municipal government has collected analysis or data to determine the impact of the carbon tax on the livelihoods of rural Albertans; and

WHEREAS such analysis is required to understand the impacts and challenges created by the carbon tax on rural residents in Alberta;

THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta (RMA) conduct a rural impact analysis on the federal carbon pollution pricing system to determine how the system is negatively impacting rural Albertans and rural municipalities and share the analysis with the governments of Alberta and Canada; and

FURTHER BE IT RESOLVED that the RMA advocate to the Government of Canada for the amendment to the Greenhouse Gas Pollution Pricing Act to halt carbon tax increases on fuel.

The Greenhouse Gas Pollution Pricing Act (the Act) which implements the federal carbon pollution pricing system, came into effect on June 21, 2018. The fuel charge began to apply in Alberta on January 1, 2020, which meant that Albertans had an added tax of $30 per ton with rates increasing every April thereafter. The carbon tax is expected to increase $15 per ton every year beginning in 2023 and continue increasing until 2030. As a result, Canadians will be paying $170 per ton by 2030.

Ontario, Saskatchewan, and Alberta have challenged the constitutionality of the carbon tax. On March 25, 2021, the Supreme Court of Canada ruled in favour of the federal carbon tax citing climate change as a matter of national importance that justified the carbon tax. Advocacy work needs to be undertaken at the federal level as the provinces have no power to repeal federal carbon taxes.

As it stands, the carbon tax has the potential to affect rural Albertans disproportionately compared to urban Albertans as rural residents use more fuel because of their transportation, and heating needs as well as the nature of their livelihoods in heavier industries, and large agriculture operations.

The Carbon Tax Rebate Program was introduced in the Fall of 2021 to help farming communities offset the high costs of the carbon tax as a direct result of their higher energy output required to produce various food products. This program does not go far enough to alleviate the disproportionate effects that the carbon tax has on rural Albertans and stands to only minimize impact on one rural Alberta population while ignoring other industries equally affected.

Direct advocacy is difficult in the absence of data. Anecdotes and personal experiences are unable to demonstrate the breadth of the unique circumstances and challenges faced by rural communities. The carbon tax is intended to reduce the carbon footprint of all Canadians by making fuel usage more expensive. Those living in urban centers have alternatives including public transportation, working from home, and other carbon reduction options, however these same solutions to reduce a carbon footprint are simply impossible in rural communities. Data supporting these assertions is necessary in order to advocate for change at the federal level.

RMA has no active resolutions directly related to this issue.

Not yet received.

While RMA has not yet received a response from the Government of Canada, RMA has begun work on an economic impact analysis report. At this point, RMA assigns this resolution a status of Accepted in Part. The impact analysis has been released on the RMA website, and includes the following key findings related to impacts on rural municipalities:

• There are two key pathways through which the federal carbon pricing policy is expected to impact rural municipalities in Alberta:
  • Increasing the prices faced by municipalities on goods that are directly and indirectly impacted by the carbon tax such as fuel, heating, and electricity, or indirectly impacted by the carbon tax (i.e., emissions-intensive goods).
  • Influencing the long-term viability of key industries (e.g., oil and gas extraction and processing) that constitute a meaningful portion of a municipality’s assessment base, thereby impacting the value of assets available for taxation. Rural municipalities tend to host the majority of heavy industry associated with resource extraction and processing that underpin a considerable portion of the provincial economy.
• While impacts on many municipalities are relatively small

The report also examines impacts on rural households and includes the following key findings:

• Direct costs of carbon tax is relatively similar between urban and rural households in Alberta. When revenue recycling is considered, the average household in both urban and rural Alberta is not currently impacted by direct carbon tax payments.
• Non-price costs of the federal fuel charge, including impacts to households through wage reductions and unemployment, may have a more pronounced impact on rural households as compared to urban households, as rural communities in Alberta host a relatively larger proportion of the province’s labour force in carbon-intensive industries.