Alberta government takes Ottawa to court over carbon tax

Premier Danielle Smith says she’s taking steps to keep Albertans warm this winter while keeping their energy bills low.

The premier announced Tuesday that the province has applied for a judicial review to be exempt from Ottawa’s federal carbon tax.

“We ask the court to declare the exemption both unconstitutional and illegal. We hope this will force Ottawa to recognize the burden the carbon tax places on Canadians and eliminate the tax altogether,” Smith said at a news conference.

The United Conservative government has been fighting the federal carbon tax since 2019, calling it “unfair” to Albertans.

“Heating is not optional in Alberta. That means we rely on natural gas not only to keep us warm, but to keep us safe,” Smith said.

In 2023, Prime Minister Justin Trudeau introduced a three-year pause on the federal carbon price for heating oil supplies in all jurisdictions where the federal fuel tax is in effect.

Smith says this effort will only benefit people living in Atlantic Canada and Quebec, where populations use heating oil.

“The outcome is grossly unfair to people in Alberta and other parts of Canada who use natural gas and other fuels to stay warm in the winter,” Smith said.

“From our position, it looks very much like yet another attempt to divide our country, to reward one region and punish another.”

Smith says less than one per cent of people in Alberta, Saskatchewan and Manitoba use home heating oil.

The province says it has not informed the federal government of its legal action, but has been clear about its position on the carbon tax for years.

Smith also claims the carbon tax is driving up the cost of living in Canada, and says the money could go to education and health care.

Alberta Justice Minister Mickey Amery says the idea of ​​creating exemptions for different types of heating used in homes creates a “separate class.”

“It is inappropriate to allow exceptions for one region of the country while unfairly treating others in other regions of the country,” Amery said Tuesday.

Amery expects the legal challenge to last about 12 months.

Would abolishing the carbon tax help?

Economist Trevor Tombe of the University of Calgary says the immediate effect of eliminating the carbon tax will vary by household.

“On average, eliminating the carbon price for consumers would shrink disposable income for a typical family, because the rebate for that family is usually greater than the carbon tax they pay,” Tombe said in an interview.

Tombe says the problem is not just about “dollars and cents,” but also about the perception of fairness when it comes to exemptions for fuel types.

According to political scientist Lori Williams of Mount Royal University, Smith taking Ottawa to court is not new.

“I don’t know on what basis the challenge would be based. If it’s a matter of, ‘I don’t like the policy,’ then that’s not something the courts are addressing,” Williams told CTV News Edmonton.

Williams says the timing of the announcement is important as Smith faces a leadership vote this weekend.

“It is clear that she is very concerned about the outcome of the vote this weekend, and she has been traveling the county, attending town hall meetings and announcing policies,” Williams said.

With files from CTVNews.ca and Chelan Skulski of CTV News Edmonton