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Everything you need to know about raising carbon tax in Alberta and BC

By  Acton Accounting |   | Posted in " Accountants, accounting services, bookkeepers, bookkeeping services, corporate tax, May 2016, personal tax, Tax & Benefits, Tax accountants, tax filing, tax return preparation, tax services "

tax filing vancouver

Previous Prime Minister Stephen Harper claims that a carbon tax would ‘destroy jobs and growth.’ However, the provincial government has a different point of view. (The Canadian Press – July 2014)

The whole world is battling against climate change. As a result of which, countries are moving away from fossil fuels, switching to clean technology and renewable energy. Two of the largest provinces of Canada Alberta and British Columbia (BC) are also working towards developing a sustainable environment.

By revising the carbon tax, the government is encouraging individuals to reduce consumption of harmful fuels and increase energy efficiency. With a lot of discussion over “raising carbon tax” in these provinces, let’s look at the following facts:

Facts about Raising Carbon Tax in Alberta

  • Climate Leadership Implementation Act, Bill 20- Shannon Phillips, Minister of Environment and Parks introduced the Climate Leadership Implementation Act for the first reading in the legislature on the afternoon of 24th May 2016.
    Bill 20 has introduced a $20 per tonne carbon levy commencing January 1st, 2017. It is said that the plan will create jobs in a higher value, lower carbon and energy efficient economy. The plan is widely supported by the energy industry and civil society.
  • Shannon Phillips’ views on Bill 20- Miss Phillips’ claims that every penny raised through the carbon tax will be reinvested into carbon related initiatives. Creating jobs, protecting the health of Albertans, erasing all doubts about Alberta’s environmental records are the main objectives of their plan. Moreover, she assures a full or partial tax rebate to 66 percent of the households in Alberta.

Some of the Key elements of Bill 20

For all the taxpayers: Under the carbon tax, couples with two children will pay $508 extra a year from 2018. Families with a combined household income of $95,000 will get a full rebate of $540. Couples with two children will not qualify for a rebate if they earn more than $101,500 a year.Ø Tax Rebate: Amendments in the Corporate Tax Act will help small businesses, adjust to the carbon price. The rates will be lowered from three to two percent, to alleviate the transition.

From 2017, single adults will receive cheques of up to $200 and couples $300 per year, depending on their income. Parents will receive an additional $30 per child under 18, for up to four children.

Energy Efficiency Alberta: An agency will be established that will provide programs and information to help people reduce their energy consumption. The province intends to have it functioning by January 2017.

Expenditure on reducing energy cost: The government plans to spend $165 million in 2018-19, $170 million in 2019-20 and $175 million in 2020-21 on reducing energy costs.

Need for Benchmarks: Alberta Party Leader Greg Clark has emphasised on the need for benchmarks to measure the success of carbon tax, particularly on getting pipelines built. According to him, there is no denial in the importance of acting on climate change but what is critical- is to understand the costs associated with the process.

tax filing vancouver Pollution in the city. Credit to Alex Gindin

Facts about Raising Carbon Tax in BC

A letter signed to Premier Christy Clark– More than 130 businesses from across BC have signed a letter demanding for a stronger carbon tax. The letter delivered on 29th March 2016, claims for a raise in carbon tax by $10 per tonne per year commencing from 2018. They believe a rise in carbon tax will encourage businesses to invest more in solutions to reduce greenhouse gases.· Who all are liable to pay the carbon tax- The list of suspects includes green energy companies, environmental consultants and mountain equipment co-op. Ironically, the list also includes people who earn their living by driving around a car co-op, a grocery delivery service and a courier company.

Current Carbon Tax Details- B.C.’s current carbon tax is $30 per tonne of CO2 equivalent emissions which adds:

  • 6.7 cents a litre to gasoline
  • 7.7 cents a litre to diesel
  • 5.7 cents a cubic metre to natural gas
  • 4.7 cents a litre to Propane
  • 62.31 dollars a tonne to Coal-high heat value
  • 53.31 dollars a tonne to Coal low – heat value

Climate Leadership Plan: The climate leadership team comprises of academics, first nations, business advocates and people from the environmental sector. The BC Government is unceasingly emphasising the importance of public consultation. The government is currently in the second phase of the plan and will release the Climate Leadership Plan in spring 2016.

Jordan Bateman views on the Carbon Tax: The director of the Canadian Taxpayer Federation Jordan Bateman is not in the favour of any increase in the carbon tax and claims that the government should reassess on who all are been given tax breaks.

Acton Accounting and Bookkeeping Inc. is the answer to all your problems regarding tax computations, tax filings and other income tax related queries. To avoid overpaying tax, you can avail our corporate tax returns and individual tax return services. Our qualified accountants and bookkeepers understand complex business or personal tax and corporate tax situations, and can help you in developing financial strategies with regard to the revision of the carbon tax.

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