The Alberta government has launched a legal challenge against the federal government’s carbon tax exemption for heating oil, contending that the Liberals’ carve-outs were illegal and unconstitutional.
Alberta filed an application with the Federal Court on Oct. 29, seeking a judicial review of the exemption. The province is asking the court to rule the exemption unconstitutional and unlawful, arguing that it contradicts the Liberals’ stated purpose for implementing the Greenhouse Gas Pollution Pricing Act.
“Last year, Ottawa decided Canadians in the East deserved a three-year break from paying the carbon tax on their home heating costs,” said Alberta Premier Danielle Smith. “Albertans simply cannot stand by for another winter while the federal government picks and chooses who their carbon tax applies to. Since they won’t play fair, we’re going to take the federal government back to court.”
Speaking at a press conference on Tuesday, Smith added that some parts of Alberta experience temperatures below -50°C with wind chill, and home heating is not optional.
“Here in Alberta, we don’t tend to think that more taxes are the solution for anything, let alone a tax on all the things our citizens need to live and thrive in this cold climate,” said Smith.
She added that putting financial burdens on Canadians facing a cost of living crisis is “cruel and punitive.”
Smith said that Alberta has been fighting against the carbon tax since 2019 and even took it to the Supreme Court of Canada in 2021.
“It was wrong when it was made into law, and it’s wrong now,” said Smith. “The federal carbon tax has always been unfair, but the selective way it’s being applied now is also unconstitutional.”
Alberta Minister of Justice Mickey Amery said that the province has been very successful in similar court cases in the past. He cited that the Emergencies Act was deemed unconstitutional, the courts struck down the plastics ban, and Bill C-69 was also said to be unconstitutional by the Supreme Court of Canada.
The Greenhouse Gas Pollution Pricing Act was deemed constitutional by the Supreme Court of Canada. However, federal jurisdiction to regulate greenhouse gas emissions was limited to creating minimum national standards for carbon pricing to reduce greenhouse gas emissions.
The Albertan government said that the Liberals are no longer creating minimum national standards applied evenly across the country, as the Atlantic region and a specific fuel type have been favoured over others.
The percentage of households using home heating oil in Alberta, Saskatchewan, and Manitoba is less than 1%. Conversely, 40% of households in Prince Edward Island use home heating oil, followed by 32% in Nova Scotia and 18% in Newfoundland and Labrador.
Worse still, Amery said that home heating oil is much less clean than natural gas, meaning the feds are rewarding other provinces for using a less environmentally-conscious heat source.
Since Apr. 1, 2024, when the carbon tax reached $80 per tonne, Albertans have paid 35 cents in federal taxes per litre of fuel, according to the Alberta government.
By 2030, some Canadians will pay more in taxes than they do for the gas itself.
Smith said that since the inception of carbon taxes, Alberta school authorities have paid more than $49 million to the feds without receiving any rebate. By 2030, she projects this number will rise to $60 million annually.
Alternatively, Smith said that money could be used to hire 495 teachers or 1,000 nurses.
The city of Calgary could have hired an additional 112 police officers or firefighters based on the money the city sent to the Liberals in carbon tax in 2023 alone, she said.
Alberta’s premier added that she recently texted British Columbia Premier David Eby and Saskatchewan Premier Scott Moe to congratulate them both on re-election. She invited Moe to join the court case. The two have joined forces before.
“This exemption is not only unfair to the vast majority of Canadians, but it is also unlawful as the federal government does not have the authority to make special exemptions for certain parts of the country under the Greenhouse Gas Pollution Pricing Act,” said Amery. “The federal government isn’t even following its own laws now. Someone needs to hold them accountable, and Alberta is stepping up to do just that.”
Amery said he expects the legal challenge to take approximately one year.
Smith said that Trudeau doesn’t have the mandate to impose the kind of policies he’s trying to, hence the recent Scrap the Cap campaign.
She noted that she hopes a federal election is called “sooner rather than later” so that a more constructive conversation can be had with the next government.