Smith fights carbon tax but reinstates gas tax

How is this contradiction `making life more affordable' for Albertans?

As Alberta motorists have surely noticed by now, the price of gasoline jumped seven cents per litre on Monday, the combined effect of two separate tax increases.

That's on top of last week's increases, as various market forces drove up the cost of gasoline by as much as 10 cents per litre. That's a lot for drivers to absorb.

The question, then, is how well-positioned Alberta households are to cope with these additional costs. It seems the Alberta government is not quite sure. Much of that rests on where a finger of blame can be pointed — and whether political points can be scored.

A finger can definitely be pointed in Ottawa's direction. Despite tacitly acknowledging through the home heating oil exemption that the carbon tax imposes financial hardship, they pressed ahead with the planned April 1 rate increase. That represents about three cents of the increase we were saddled with this week.

Alberta's premier was among those calling on the prime minister to reconsider. Danielle Smith wrote to the Commons finance committee, imploring them to allow her to testify on the harms of the carbon tax increase, warning that Albertans and Canadians are feeling “increasing pressures” from “crippling inflation.”

In fact, on more than one occasion last week, the premier referred to an “inflation crisis” and an “affordability crisis” as compelling reasons Ottawa should not be imposing additional costs on households.

Certainly, we've seen overall inflation start to come down, although it's still short of the Bank of Canada's target. Interestingly, the latest inflation data showed that Alberta's rate was the highest in the country — higher than even the national rate.

As to whether this all still constitutes a “crisis” is very much subjective.

It was a concern over affordability and the effect of the federal carbon tax that led Alberta to suspend the provincial excise tax two years ago. Allowing that tax to be fully restored to 13 cents a litre (which represented a four-cent-per-litre price increase as of Monday) implies that we are no longer in an affordability crisis and that other concerns — such as keeping the budget balanced, and funding infrastructure and social services — are now more pressing priorities.

The higher tax rate is in keeping with the formula laid out in the original policy announcement. Given the more recent bump in oil prices, it's possible we'll see further ups and downs in that rate.

However, the province is clearly not beholden to that formula. During last year's election, the premier promised to maintain the gas tax holiday through the entirety of 2023, which pre-empted whatever quarterly fluctuations the price of oil might have experienced. That promise was necessary, we were told, to offset the federal carbon tax, which “makes everything Albertans need to live more expensive.”

Well, that carbon tax is still there (and it's gone up). We're still in an “affordability crisis,” according to the premier. So how does the province square that with its decision to add to the “increasing pressures” they say Albertans are facing?

In fact, Albertans were promised in that election campaign that the UCP was “committed to making life more affordable.” But 10 months later, what can they point to as evidence of that?

The gasoline tax has returned, the promised income tax cut has been shelved, and the most recent budget introduced a number of new taxes and fees. On top of that, Albertans have faced additional financial pressure when it comes to things such as rent, auto insurance and electricity.

It's reasonable to argue there are other priorities that require the government's focus. But at the same time, it demands Ottawa make affordability the top priority because we're in a “crisis.”

So which is it?