Alberta files for judicial review of federal carbon tax exemption

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EDMONTON – Premier Danielle Smith says Alberta has sought a judicial review of Ottawa’s exemption from the carbon tax on home heating oil.

In an announcement Tuesday, Smith said it’s “blatantly” unfair to Albertans who rely on natural gas to heat their homes, and the relief can’t wait with cold winter weather approaching.

Attorney General Mickey Amery said it took about a year for the province to gather its legal arguments and he expects it will take another year to get through federal court.

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The province is asking the court to declare the exemption both unconstitutional and illegal, in hopes of eliminating the carbon tax altogether.

“The federal carbon tax has always been unfair, but the selective way it is now being applied is also unconstitutional, and the impact on Albertans will only worsen as costs continue to rise,” Smith said.

Amery said offering a benefit to those who use home heating oil, mainly in Atlantic Canada, undermines what should be a national standard aimed at meeting emissions targets.

Prime Minister Justin Trudeau’s Liberals have said the carbon tax is intended to combat climate change and put more money in Canadians’ pockets in the form of rebates.

But Smith said the tax is increasingly contributing to rising consumer costs, and taxpayers are being hit in other ways.

The premier said her government predicts Alberta school authorities will have to pay more than $60 million a year by 2030 without receiving any rebates.

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In the past, Smith has urged lawmakers in Ottawa to approve an exemption for farmers who use propane to dry grain and natural gas to heat barns.

When Ottawa offered the three-year home heating oil exemption, it also announced it would double the rebate for rural Canadians.

On Tuesday, Smith told reporters that she had not had any direct discussions with the federal government beforehand about the judicial review application.

“But we’ve been letting them know for a while, for years, that we’re not happy with the approach they’re taking,” Smith said.

Her predecessor, former UCP Premier Jason Kenney, repealed the previous NDP government’s carbon tax on consumers when he came to power, forcing the province to impose the federal backstop.

The Alberta government led a legal battle in 2019, arguing the tax was unconstitutional.

The Supreme Court of Canada ultimately upheld the federal law in 2021.

Alberta NDP Leader Naheed Nenshi said Smith is digging up a year-old problem and launching a performative, protracted and unwinnable legal battle with Ottawa instead of working toward a better deal for Alberta.

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“Could it have something to do with her (party) leadership (review) on Saturday?” Nenshi said.

Nenshi dismissed Smith’s legal threats as “endless job creation for lawyers” and said they have not helped any Albertan deals with rising costs.

He told reporters in the legislature that the federal government’s commitment to heating oil was poisoning the well of public support.

Nenshi did not say whether he would repeal the carbon tax, but said it would depend on whether the Liberals remain in office.

“If the Conservatives take power federally, there will be no carbon tax for consumers, and we will have to come up with an emissions reduction plan that gets us to the net-zero targets that even this UCP government has,” he said.

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