Smith defends provincial gas tax hike, hints legal challenge on carbon tax could be coming

The premier appeared as a witness before the federal Standing Committee on Government Operations and Estimates on Thursday

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Appearing before a House of Commons committee, Alberta Premier Danielle Smith defended her government’s plan to hike the provincial fuel tax while also calling on Ottawa to pause the coming increase in the carbon tax, something she later said the province could challenge in court.

Smith appeared by video link early Thursday and addressed the standing committee on government operations and estimates.

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In her opening statement, she asked members to “heed the calls” to suspend the increase in the carbon tax, which is scheduled to increase to $80 per tonne from $65 per tonne on April 1, prompting a likely increase in fuel prices.

“The only thing the federal carbon tax is achieving is higher costs,” Smith said.

“It begs the question how far will the federal government go to make life even more difficult and expensive when so many Canadians are already struggling?”

‘No rebate’

Alberta Conservative MPs Jasraj Singh Hallan and Laila Goodridge — herself a former United Conservative Party MLA — lobbed softball questions to the premier about the carbon tax and Alberta’s relationship with the federal government.

Things turned feistier when Ontario Liberal MP Irek Kusmierczyk asked her about her appearance on stage alongside federal Conservative leader Pierre Poilievre at an “axe the tax” rally in Edmonton Wednesday night.

He asked if she was there also protesting the looming four-cent hike in the provincial gas tax that is also slated to kick in Monday and will increase the provincial tax to 13 cents per litre.

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“The federal government charges 35 cents in gasoline taxes. We charge 13 cents, and our 13 cents goes to build roads,” she said, having earlier noted the province suspended the gas tax on New Year’s Day 2023.

Alberta’s fuel tax will remain at 13 cents per litre at least until June 30. The tax rate is adjusted quarterly based on a scale determined by the average price of a barrel of West Texas Intermediate (WTI).

The price of WTI sat at US$83 as of mid-day Thursday, which if it holds as an average would be above the US$80 threshold to lower the tax again to nine cents per litre the next time it is adjusted.

Later in the hearing, Ontario Liberal MP Yasir Naqvi contrasted the province’s fuel tax hike with the rebate received from the federal carbon tax.

“There will be no rebate for Alberta families for the increase they will be see on April 1,” he said.

“Albertans will get it removed completely if gas prices remain high,” Smith replied, adding, “I’d love to see the federal government do the same.”

On Wednesday, Opposition Leader Rachel Notley called on Smith to halt the fuel tax hike, noting Alberta is the only province to see two gas tax increases.

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“Instead of complaining and playing partisan politics about a tax for which people get a rebate, the premier should focus on the tax over which she has complete control for which they do not get a rebate”

Carbon tax challenge to come?

Smith also said during Thursday’s hearing that the Alberta government is currently pursuing “about 14” different legal actions against the federal government.

Justice Minister Mickey Amery told reporters those include active litigation involving plastics and the Impact Assessment Act as well as six judicial reviews regarding a federal firearms ban and also four other reviews regarding the Emergencies Act.

At an unrelated news conference later Thursday, Smith went on to say future litigation could also include a challenge to the carbon tax itself.

“We are seeking advice on whether we can also challenge the carbon tax now that it’s, I think, violating the spirit of what was decided in the original Supreme Court action, which was to apply a tax equally across the country to all users in all provinces,” she said, referencing the October pause on the tax for home heating oil, a fuel used predominantly in Atlantic Canada.

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Opposition justice critic Irfan Sabir said the government’s legal challenges play better with its base supporters than in the courts and characterized the lawsuits as a “distraction.”

“All of these lawsuits may help the premier’s political base but it’s not helping us with the cost of living. It’s not helping us with the health care crisis. It’s not helping us with schools in our communities,” Sabir said.

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