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Axe the carbon tax to restore Alberta business confidence

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By Amber Ruddy

Published in "Business in Calgary/Edmonton" on October 1, 2018

All along, small business owners in Alberta have had concerns about introducing a provincial carbon tax. The recent court decision revoking approval of the Trans Mountain pipeline project only further cements those concerns.

Earlier this year, uncertainty on the Trans Mountain pipeline project’s livelihood began to seriously erode confidence in the Canadian business climate. In light of this, a group called Confidence in Canada formed to press for a resolution to the impasse on the project. Confidence in Canada represents more than 110 business, industry and community groups, and hundreds of thousands of Canadians.

Now, we are at a stalemate. This is no longer an issue about whether a pipeline should be built. It’s an issue of whether or not businesses – large or small, across our economy – can invest with confidence knowing the rules won’t retroactively change.

Following the court announcement rescinding the pipeline’s approval, Alberta’s Premier Rachel Notley began backing away from the federal climate plan, which includes yearly carbon tax increases. While there is still much uncertainty for the pipeline, this is a step in the right direction for Alberta. But let’s not stop there - provincial carbon taxes should be repealed, too.

According to new analysis by the Canadian Federation of Independent Business (CFIB), 87 per cent of business owners surveyed in Alberta want to axe the carbon tax. 

Furthermore, 86 per cent say carbon taxes increase their operating costs, 85 per cent state it reduces their profitability, 66 per cent say it increases pressure to freeze and cut salaries, while 59 per cent warn it causes a delay in investments in employee training and business equipment.

The concept of social license is to take steps to protect the environment and in return gain support for developing our natural resources in a sustainable way. Under the current circumstances, the carbon tax doesn’t do much to gain so-called ‘social licence’.

This year, business owners faced a carbon tax increase of $10 per tonne, hitting $30/ tonne in 2018. If Alberta is to maintain its carbon tax, at minimum it should be revenue neutral. CFIB survey data shows that 83 per cent of entrepreneurs believe the provincial small business corporate income tax rate should be lowered to zero to mitigate the impact.

There is merit for the provincial government to decrease small business taxes – as was done January 1st, 2016 from three down to two per cent. So why haven’t small business taxes continued to go down?

The Alberta Government’s so called ‘Climate Leadership Plan’ belongs in the recycle bin. Small businesses support further development of the provinces’ resources with appropriate environmental safeguards but levying more taxes doesn’t get us there. Real leadership would show action on getting our valued natural resources to new markets for the benefit of the Canadian economy.

Amber Ruddy is the Director of Provincial Affairs for the Canadian Federation of Independent Business.  She can be reached at [email protected]. Follow her on Twitter @aruddy.

This story was originally published in the Business in Calgary/Edmonton Magazine