Canada Consumer Carbon Tax Program (Rebates or Exemptions for Municipalities)
IT IS THEREFORE RESOLVED THAT Alberta Municipalities advocate to the Government of Alberta to work with the Government of Canada to ensure municipal governments are exempt from any future replacement of a consumption-based carbon tax or at minimum, expand the eligibility of Canada Carbon Tax rebates to include municipal governments.
WHEREAS municipalities have been and continue to be leaders in environmental initiatives to reduce their greenhouse gas (GHG) emissions;
WHEREAS municipalities are involved in initiatives such as developing environmental master plans, climate action strategies, GHG inventories, community energy and emissions plans, sustainable building strategies, urban forest management plans, sustainable urban design, waste management improvements, multimodal transportation plans, grant funding for community environmental initiatives, rebates for energy and water conservation fixtures, clean energy financing programs, natural asset management, wildfire mitigation actions, renewable energy projects, and much more;
WHEREAS municipalities incur consumer carbon tax costs providing community infrastructure and services such as heating public buildings, providing public transit, and maintaining community parks and public works;
WHEREAS Alberta’s municipalities have paid tens of millions of dollars in carbon consumption taxes since their introduction, limiting the ability of municipalities to provide other vital programs and infrastructure to their communities; and
WHEREAS there have been Canada Carbon Tax Rebates and some exemptions for individuals since the inception of the program and in October 2024 the Government of Canada expanded Canada Carbon Tax Rebates to include small businesses; and
WHEREAS the Government of Canada has suspended its consumer carbon tax structure.
Federal Carbon Pricing was introduced in 2019 and legislated for provinces who had not installed their own consumer carbon tax program. The Federal Fuel Charge began being charged on gasoline, natural gas, and other fuels consumed by Albertans beginning January 1, 2020.
In 2019, the carbon price was $20 per tonne, which had gradually increased to $80 per tonne as of April 1, 2024. As of April 1, 2025, the Government of Canada has reduced the carbon price to $0 for consumers and is exploring the future of the taxation program.
Since its inception, the Government of Canada has provided a rebate for individuals designed to offset a portion of increased expenses due to the new charge. In October 2024, the Government of Canada extended the rebate to small businesses who met certain criteria and made the rebate retroactive to 2020 for eligible businesses.
Direct costs of carbon pricing on municipalities varies by municipality, but the direct costs are in the tens of millions of dollars per year. In 2023 these numbers were collected by the Canadian Energy Centre[1]:
- Lloydminster: $422,248
- Calgary: $12,303,000 (estimate)
- Medicine Hat: $876,237
- Lethbridge: $1,398,000 (estimate)
- Grande Prairie: $757,562
- Crowsnest Pass: $71,100
- Red Deer: $1,495,945
- Bonnyville: $19,484
- Hinton: $66,829
Municipalities provide vital services to their communities each day. Including but not limited to, road maintenance and construction, water and wastewater utilities, waste management, recreation facilities, parks and playgrounds and emergency services. Transferring local taxpayer dollars to other levels of government reduces municipalities’ ability to provide these critical services.
Every municipality has a different impact; however, for example, the City of Red Deer’s cost of the Federal Fuel Charge (approximately $1.5 million) directly resulted in an estimated 1% property tax increase during the most recent budget.
Municipalities in Alberta are already leaders in environmental stewardship, often at a significant expense to their budgets. Municipalities are reporting regularly to the public on their progress towards reaching GHG emission targets at the community and corporate levels. This demonstrates municipal leadership and commitment to accountable stewardship and sustainable management of our natural resources and the environment.
In October 2024, The City of Bellville, ON, passed the following Council resolution:
THAT Mayor and Council of the City of Belleville requests that the Government of Canada create an efficient administrative program for municipalities to receive full reimbursement on direct carbon tax costs that are incurred providing essential and public safety programs and services, such as fuel purchases for its fleet and equipment as well as natural gas costs for heating facilities[2]
[1] Canadian Energy Centre Staff November 22, 2024, “REPORT: Alberta municipalities hit with $37 million carbon tax tab in 2023” https://www.canadianenergycentre.ca/report-alberta-municipalities-hit-with-37-million-carbon-tax-tab-in-2023/
[2] The City of Belleville - Meeting Information October 28, 2024.”Regular Council Meeting Minutes” https://citybellevilleon.civicweb.net/Portal/MeetingInformation.aspx?Org=Cal&Id=988
ABmunis does not currently have a position on this specific issue but there is alignment to ABmunis current research on the cumulative financial impacts on municipal governments as a result of decisions by the provincial and federal governments. If this resolution is approved, it will be forwarded to the Government of Alberta to communicate with the Government of Canada on behalf of municipalities. Further advocacy will be determined by ABmunis’ Board based on input from ABmunis’ relevant policy committee within the context of ABmunis’ priorities and positions.