UCP vow to scrap carbon tax would see Ottawa 'impose their will' on Alberta: Ceci

Alberta's finance minister said if the United Conservative Party gains power, it would kick off a chain of events that would "allow the federal government to impose their will on Alberta."

And while UCP Leader Jason Kenney would almost certainly disagree with that phrasing, he does say his proposed challenge against the federal plan could fail — but he asserts that even then, the province would be better off.

"The Alberta NDP carbon tax scheme is nothing but a massive tax grab," the UCP leader said in a Facebook video in response to Ottawa's Tuesday announcement.

Kenney said the federal plan offers a bigger return to homeowners than the province, and that if the UCP wins, repeals Alberta's tax, challenges the federal one, and loses, it'll still be a win.

"If we fight the federal carbon tax and lose then all households will actually get a tax rebate."

Ottawa levy applies to provinces with no pricing plans

Ottawa's carbon levy, announced Tuesday, will apply to provinces and territories that have no emission pricing plans of their own.

That includes Saskatchewan, Manitoba, Ontario and New Brunswick starting in April 2019, and Yukon and Nunavut as of July 2019. It will not apply to Alberta, unless the UCP wins and scraps the province's plan.

"The impact would be if Jason Kenney wins the next election and does as he promises to end the provincial plan and then the federal plan would kick in," said political scientist Duane Bratt.

Economist Trevor Tombe said both Ottawa and Alberta's taxes set a similar per-tonne price on carbon — but the difference is what they do with the revenue.

"Under the federal system, it'll be a universal rebate. Roughly 40 per cent of the Alberta carbon tax revenue is sent back in the form of rebates, that would rise to 90 per cent under the federal," Tombe said.

Two in three Alberta households received a rebate between $300 and $540 this year, and the federal rebates will vary from about $248 to $598 based on household size and province.

The rest of Alberta's carbon tax revenue goes toward renewable energy initiatives, economic diversification, tax cuts for small businesses, and investments to mass transit like Calgary's Green Line, said Finance Minister Joe Ceci.

He said it's important that it's a plan that's tailored for the province in that it offers exemptions for oil and gas.

"Mr. Kenney is wrong in that regard. We know he doesn't believe in climate change, we know he would fight the federal government, he would lose to the federal government, and the federal government will impose what they will on Albertans," he said.

"I don't think Albertans want to be at the behest of the federal government, I think they want their own programs."

Universal rebates not necessarily a win

Bratt said he doesn't see Kenney's court challenge against the federal plan going well.

"I don't think that's gonna fly … The ability of taxing is clearly in the hands of the federal government. I don't think that challenge is going to go anywhere," said Bratt.

And Tombe said while switching to the federal plan would mean every household would get a cheque in the mail, it wouldn't necessarily be a win.

"By remitting almost all of the proceeds with the flat transfer to households you forgo some of the potential economic efficiency benefits," he said.

With files from Reid Southwick.