Alberta carbon tax prompts fierce oil and gas competitiveness debate

The impact of Alberta's new carbon levy on the oil and gas industry was hotly debated in Calgary on Wednesday, a day after it was passed by the NDP government.

CALGARY — The impact of Alberta’s new carbon levy on the oil and gas industry was hotly debated in Calgary on Wednesday, a day after it was passed by the NDP government.

Alberta Energy Minister Marg McCuaig-Boyd, who spoke at an industry conference, insisted the province can compete with neighbouring Saskatchewan, which doesn’t have a carbon tax.

“We’re still pretty competitive overall in Canada,” said McCuaig-Boyd. “We’re one of the lowest (tax) jurisdictions and, I always have to remind people, we don’t have a provincial sales tax.:

But Gary Leach, president of the Explorers and Producers Association of Canada, said the carbon tax could drive investment away to other provinces or the United States.

“We’re competing in a North American market,” he said. “The price for our energy exports is set outside of Alberta. We don’t set the prices. So to the extent where our industry is shouldering a competitive burden that our competitors are not, that is a serious concern.”

Beverly Gilbert, national commodity tax leader for law firm Borden Ladner Gervais, said there’s no question that Alberta producers will face higher costs and a “huge compliance burden” as a result of the carbon tax.

“They will be paying this non-refundable tax that people in Saskatchewan will not be paying, for instance, on things like venting and flaring,” Gilbert said. “That makes us less competitive.”

Gilbert acknowledged, however, that the fact that Alberta has no provincial sales tax gives it a substantial advantage that producers in other provinces don’t have.

The carbon levy, to take effect Jan. 1, is one element of a climate-change strategy intended to reduce Alberta’s carbon footprint. It is expected to bring in $3 billion in 2017-18.

Cenovus Energy (TSX:CVE) spokesman Brett Harris said his company has supported Alberta’s climate change initiative from the start and would like to see it extended across North America so there’s a “level playing field” for all competitors.

“We think over the long term it actually gives Alberta a potential competitive advantage because it establishes us as a world leader, especially in terms of oil-producing jurisdictions,” he said.

Just Posted

‘My nightmare began again’: Close call as bus carrying Humboldt crash survivor rear-ended

CALGARY — A terrifying ordeal for Humboldt Broncos survivor Ryan Straschnitzki this… Continue reading

Annual pace of housing starts picked up in November, tops expectations

OTTAWA — Canada Mortgage and Housing Corp. says the annual pace of… Continue reading

China pressures US, Canada ahead of Huawei hearing

BEIJING — China raised the pressure on the United States and Canada… Continue reading

Equalization formula a hot topic as finance ministers meet

OTTAWA — For the first time in a decade Ontario will not… Continue reading

Canada Post backlog, Greyhound exit creating headaches ahead of the holidays

Jennifer Critch hopes to spend Christmas morning watching her two young daughters… Continue reading

WATCH: Red Deer and District Kennel Club Dog Show at Westerner Park

The Red Deer and District Kennel Club is holding a dog show… Continue reading

Orlando SC acquires Canadian Tesho Akindele in trade with FC Dallas for cash

ORLANDO, Fla. — Canadian forward Tesho Akindele was traded to Orlando City… Continue reading

Koskinen notches third shutout, McDavid gets winner as Oilers blank Flames 1-0

EDMONTON — The Edmonton Oilers appear to have shored up their defence… Continue reading

Beyonce performs at pre-wedding party in India

Beyonce brought her star power to a pre-wedding party for the daughter… Continue reading

Kirk Douglas celebrates 102nd birthday

LOS ANGELES — Actor Kirk Douglas got to celebrate his 102nd birthday… Continue reading

Ellen Page steps up attack on Nova Scotia pulp mill’s effluent pipeline

HALIFAX — Hollywood actor Ellen Page is doubling down on her criticism… Continue reading

Pence aide out of running to be Trump’s next chief of staff

WASHINGTON — President Donald Trump’s top pick to replace chief of staff… Continue reading

Swath of South faces wintry mess: Snow, sleet, freezing rain

CHARLOTTE, N.C. — A massive storm brought snow, sleet, and freezing rain… Continue reading

‘I killed my best friend’: Opioids’ fatal grip on mayor, pal

MOUNT CARBON, Pa. — Janel Firestone found her son — the 24-year-old,… Continue reading

Most Read