OTTAWA — The federal government’s plan to impose a carbon tax on provinces that don’t do it themselves is expected to mimic the Alberta carbon program, including rebate payments sent directly to low- and middle-income individuals.
A source who has seen the plan tells The Canadian Press that the technical paper outlining Ottawa’s proposal will be released next week, seven months after Prime Minister Justin Trudeau told provinces they’d have until 2018 to implement a price on carbon or have Ottawa do it for them.
The Alberta model applies a tax on carbon generated by burning most transportation and heating fuels, except for those used on farms. It divides the tax revenue among income-based rebates to Albertans, a cut to the small business tax and investments in green infrastructure and renewable energy.
Trudeau and Environment Minister Catherine McKenna have always said any revenue from a carbon tax would remain in the province where it is raised, but they have been careful not to say it would go to the provincial government. By following the Alberta model, the federal government can send some of the money raised by the tax to individuals, bypassing provincial governments which refuse to impose their own carbon price.