Alberta
Alberta joins provincial opposition to federal Clean Fuel Regulations gas tax
Alberta joins provinces opposing federal regulations: Minister Schulz
Minister of Environment and Protected Areas Rebecca Schulz sent a letter to federal Minister of Environment and Climate Change Steven Guilbeault on the upcoming Clean Fuel Regulations:
“Today, I sent a letter to Minister Steven Guilbeault informing him that the Government of Alberta is joining the Government of Saskatchewan and the Atlantic provinces in calling on the federal government to immediately halt the implementation of the federal Clean Fuel Regulations on July 1.
“The federal Clean Fuel Regulations will harm provincial economies in Alberta, Saskatchewan and Atlantic Canada. Combined with the federal government’s carbon tax increase, higher gasoline and diesel costs are expected, putting added cost pressures on other goods and services across the country.
“Now is not the time to drive up prices at the pump and increase expenses for vulnerable households, businesses and industries. Families and businesses cannot continue to afford reckless cost and tax increases imposed by the federal government.
“Alberta has released an Emissions Reduction and Energy Development Plan which is our best path to enhancing our position as a global leader in emissions reductions, clean technology and innovation, and sustainable resource development. It includes a realistic aspiration to have a carbon-neutral economy by 2050, without compromising the affordable, reliable and secure energy that we all rely on.
“What we need now is a concrete plan that will help move us forward in realistic and innovative ways. The federal government needs to stop moving ahead with their costly plans until a path forward can be found that supports all Canadians.”
The letter
Dear Minister Guilbeault:
On behalf of the Government of Alberta, I am joining the Government of Saskatchewan and the Atlantic provinces in calling on the federal government to immediately halt the implementation of the upcoming Federal Clean Fuel Regulations.
Alberta is committed to reducing emissions while keeping energy reliable, secure, and affordable. Our Emissions Reduction and Energy Development Plan works towards a carbon neutral economy; commits to reviewing renewable fuel standards; increases minimum requirements for blending for ethanol and bio based diesel; includes fuel emission intensity reductions; and other major steps forward. We believe this is a path forward that will work for our unique circumstances.
The Federal Clean Fuel Regulations, however, will harm provincial economies in Alberta, Saskatchewan and Atlantic Canada. A plan that unfairly increases costs on families and does not account for regional differences is no plan at all.
The Office of the Parliamentary Budget Officer (PBO) confirmed this in a May 2023 report that found that the Clean Fuel Regulations would hit Alberta, Saskatchewan, and the Atlantic provinces the hardest. The PBO’s report estimated that the cost increase to the average Alberta households in 2030 would be $1,117.
Canadians are already struggling with high inflation. Adding fuel to the fire by hiking the cost of gasoline and diesel will be devastating.
This issue requires immediate attention. Given the pending implementation date of July 1, 2023, Alberta is requesting that the regulations be halted until a path forward can be found that supports all Canadians and addresses the concerns of Alberta, Saskatchewan, and the Atlantic provinces.
Sincerely,
Rebecca Schulz
Minister of Environment and Protected Areas
Alberta
Alberta government should eliminate corporate welfare to generate benefits for Albertans
From the Fraser Institute
By Spencer Gudewill and Tegan Hill
Last November, Premier Danielle Smith announced that her government will give up to $1.8 billion in subsidies to Dow Chemicals, which plans to expand a petrochemical project northeast of Edmonton. In other words, $1.8 billion in corporate welfare.
And this is just one example of corporate welfare paid for by Albertans.
According to a recent study published by the Fraser Institute, from 2007 to 2021, the latest year of available data, the Alberta government spent $31.0 billion (inflation-adjusted) on subsidies (a.k.a. corporate welfare) to select firms and businesses, purportedly to help Albertans. And this number excludes other forms of government handouts such as loan guarantees, direct investment and regulatory or tax privileges for particular firms and industries. So the total cost of corporate welfare in Alberta is likely much higher.
Why should Albertans care?
First off, there’s little evidence that corporate welfare generates widespread economic growth or jobs. In fact, evidence suggests the contrary—that subsidies result in a net loss to the economy by shifting resources to less productive sectors or locations (what economists call the “substitution effect”) and/or by keeping businesses alive that are otherwise economically unviable (i.e. “zombie companies”). This misallocation of resources leads to a less efficient, less productive and less prosperous Alberta.
And there are other costs to corporate welfare.
For example, between 2007 and 2019 (the latest year of pre-COVID data), every year on average the Alberta government spent 35 cents (out of every dollar of business income tax revenue it collected) on corporate welfare. Given that workers bear the burden of more than half of any business income tax indirectly through lower wages, if the government reduced business income taxes rather than spend money on corporate welfare, workers could benefit.
Moreover, Premier Smith failed in last month’s provincial budget to provide promised personal income tax relief and create a lower tax bracket for incomes below $60,000 to provide $760 in annual savings for Albertans (on average). But in 2019, after adjusting for inflation, the Alberta government spent $2.4 billion on corporate welfare—equivalent to $1,034 per tax filer. Clearly, instead of subsidizing select businesses, the Smith government could have kept its promise to lower personal income taxes.
Finally, there’s the Heritage Fund, which the Alberta government created almost 50 years ago to save a share of the province’s resource wealth for the future.
In her 2024 budget, Premier Smith earmarked $2.0 billion for the Heritage Fund this fiscal year—almost the exact amount spent on corporate welfare each year (on average) between 2007 and 2019. Put another way, the Alberta government could save twice as much in the Heritage Fund in 2024/25 if it ended corporate welfare, which would help Premier Smith keep her promise to build up the Heritage Fund to between $250 billion and $400 billion by 2050.
By eliminating corporate welfare, the Smith government can create fiscal room to reduce personal and business income taxes, or save more in the Heritage Fund. Any of these options will benefit Albertans far more than wasteful billion-dollar subsidies to favoured firms.
Authors:
Alberta
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