CALGARY, Alberta (Reuters) – Canada’s main crude-producing province Alberta introduced a bill to repeal the provincial carbon tax on Wednesday, setting up a legal tussle between Premier Jason Kenney’s United Conservative Party and Justin Trudeau’s Liberal government in Ottawa.
Premier Kenney and his party swept to power in Alberta last month on a platform that promised to champion the province’s beleaguered energy industry and stand up to the federal government.
Scrapping Alberta’s carbon tax, introduced by the previous government, was a major part of Kenney’s campaign. It will be the first piece of legislation tabled by the new government, but puts the province on a collision course with Trudeau’s Liberals ahead of a national election this fall.
The move will automatically trigger a federal carbon tax aimed at provinces that do not have their own plans to curb greenhouse gas emissions.
“The carbon tax has been all economic pain and no environmental gain,” Kenney told reporters at a news conference. “If Justin Trudeau’s government then seeks to impose a federal carbon tax in Alberta, we will see him in court.”
Alberta will join Ontario, Manitoba and Saskatchewan when it challenges the federal carbon tax in court. Earlier this month Saskatchewan’s Court of Appeal ruled the tax does not violate the Canadian constitution, marking a victory for Trudeau on one of his trademark policies.
Kenney said his government has a stronger case than Saskatchewan because Alberta will still impose a levy on large industrial carbon emitters.
The Carbon Tax Repeal Act will provide C$1.4 billion in tax relief to Albertans and create 6,000 jobs, the government said in the first legislative session in the provincial capital Edmonton.
“Now more than ever Canadians expect their leaders to work together to reduce pollution, not play politics,” said Vanessa Adams, spokeswoman for the Minister of Natural Resources Canada, in an emailed statement. “If Premier Kenney dismantles Alberta’s climate plan, the federal backstop will apply.”
Kenney’s government also plans to table legislation to lower Alberta’s corporate tax rate from 12% to 8%, cut back on regulation and guarantee oil and gas royalty rates, moves aimed at increasing the competitiveness of the energy industry.
Alberta is home to Canada’s vast oil sands but has seen billions of dollars in foreign investment flee the province since 2017 in part because of concerns about market access and regulatory uncertainty.
Additional reporting by Steve Scherer in Ottawa; Editing by James Dalgleish and Richard Chang