Carbon Tax Set To Impact City Operations
The federal Carbon Tax if implemented as is will have a major cost on City operations
With the Carbon Tax being a hot political topic both federally and provincially it is now on the stove and simmering at City Hall.
On Monday evenings Budget Committee heard a report about the effects of the Carbon Tax on the City's operations and the news for the cost conscious is not a good one.
During his presentation to Budget Committee Director of Finance Brian Acker said the analysis is it will cost the City $730,000 initially and then increase to $1.825 million by 2022.
With a one percent tax increase garnering $285,000 for City coffers the Carbon Tax represents a 2.5 percent tax increase at its initial introduction.
The Federal Government has instituted a $20 per tonne Carbon Tax on emissions effective January 1st and climbing to $50 per tonne in 2022. For the City it means a financial cost.
Acker stated anything burning fossil fuels - gasoline, natural gas and electricity – will be subject to the Carbon Tax.
“SaskPower has estimated it to have a six percent increase,” Acker said or $161,000 impact on the City's power bill.
For natural gas the impact is $1 per gigajoule or $62,000 impact on the City's budget.
For gas and diesel the impact is four cents per litre or an additional $24,000 impact on the City budget April 21st.
Carbon Tax will see $24,000 in City coffers literally out the tailpipe
The bulk of the increase of $482,000 is in capital costs in repair and replacing City infrastructure.
Acker said there are three things which can influence the final cost to the City.
The first is a Government of Saskatchewan challenge against the Federal Government’s right to place the tax on the province.
The second is there is “still uncertainty on the overall progress of how the Carbon Tax will impact and trickle down.”
And finally there has been some indication from the Federal Government to rebate 100 percent of the cost of the Carbon Tax to municipalities.
“We have not seen a lot of information on that one,” he said.
Although the report was received and filed Councilor Dawn Luhning had some harsh criticisms about the Carbon Tax's impact on the City.
“I was thinking of this in one word and that is download,” Councilor Luhning stated.
Regarding the tax and the rumoured rebate to municipalities she said she did not believe it would happen.
“I don’t expect to get anything back so why have a Carbon Tax?” Councillor Luhning asked.
When the Carbon Tax was announced the reason given for its introduction was to reduce the amount of carbon being put into the atmosphere and meet targets set out in international agreements. The move was designed to reduce emissions and lessen the impact of Climate Change and Global Warming. Some have dismissed this.
The tax was suppose to be neutral with many consumers in Saskatchewan receiving rebates – some in excess of the amount of tax they spent. This drew heavy criticism and accusations of vote buying by the Federal Government. The move did garner more acceptance of the tax according to polls.
Funds were also suppose to flow to yet to be identified
Other emitters have been exempted to some extent.