Alberta
Alberta joins provincial opposition to federal Clean Fuel Regulations gas tax
Alberta joins provinces opposing federal regulations: Minister Schulz
Minister of Environment and Protected Areas Rebecca Schulz sent a letter to federal Minister of Environment and Climate Change Steven Guilbeault on the upcoming Clean Fuel Regulations:
“Today, I sent a letter to Minister Steven Guilbeault informing him that the Government of Alberta is joining the Government of Saskatchewan and the Atlantic provinces in calling on the federal government to immediately halt the implementation of the federal Clean Fuel Regulations on July 1.
“The federal Clean Fuel Regulations will harm provincial economies in Alberta, Saskatchewan and Atlantic Canada. Combined with the federal government’s carbon tax increase, higher gasoline and diesel costs are expected, putting added cost pressures on other goods and services across the country.
“Now is not the time to drive up prices at the pump and increase expenses for vulnerable households, businesses and industries. Families and businesses cannot continue to afford reckless cost and tax increases imposed by the federal government.
“Alberta has released an Emissions Reduction and Energy Development Plan which is our best path to enhancing our position as a global leader in emissions reductions, clean technology and innovation, and sustainable resource development. It includes a realistic aspiration to have a carbon-neutral economy by 2050, without compromising the affordable, reliable and secure energy that we all rely on.
“What we need now is a concrete plan that will help move us forward in realistic and innovative ways. The federal government needs to stop moving ahead with their costly plans until a path forward can be found that supports all Canadians.”
The letter
Dear Minister Guilbeault:
On behalf of the Government of Alberta, I am joining the Government of Saskatchewan and the Atlantic provinces in calling on the federal government to immediately halt the implementation of the upcoming Federal Clean Fuel Regulations.
Alberta is committed to reducing emissions while keeping energy reliable, secure, and affordable. Our Emissions Reduction and Energy Development Plan works towards a carbon neutral economy; commits to reviewing renewable fuel standards; increases minimum requirements for blending for ethanol and bio based diesel; includes fuel emission intensity reductions; and other major steps forward. We believe this is a path forward that will work for our unique circumstances.
The Federal Clean Fuel Regulations, however, will harm provincial economies in Alberta, Saskatchewan and Atlantic Canada. A plan that unfairly increases costs on families and does not account for regional differences is no plan at all.
The Office of the Parliamentary Budget Officer (PBO) confirmed this in a May 2023 report that found that the Clean Fuel Regulations would hit Alberta, Saskatchewan, and the Atlantic provinces the hardest. The PBO’s report estimated that the cost increase to the average Alberta households in 2030 would be $1,117.
Canadians are already struggling with high inflation. Adding fuel to the fire by hiking the cost of gasoline and diesel will be devastating.
This issue requires immediate attention. Given the pending implementation date of July 1, 2023, Alberta is requesting that the regulations be halted until a path forward can be found that supports all Canadians and addresses the concerns of Alberta, Saskatchewan, and the Atlantic provinces.
Sincerely,
Rebecca Schulz
Minister of Environment and Protected Areas
From the Fraser Institute
By Tegan Hill
According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.
The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.
For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).
And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.
In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.
This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.
Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.
Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.
Of course, if the government falls back into deficit there are implications for everyday Albertans.
When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.
According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.
Author:
Better, faster, more affordable auto insurance
Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans while reducing auto insurance premiums.
After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, Alberta’s government is introducing a new privately delivered, care-focused auto insurance system.
Right now, insurance in the province is not affordable or care focused. Despite high premiums, Albertans injured in collisions do not get the timely medical care and income support they need in a system that is complex to navigate. When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year.
“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable. When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”
“High auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”
Albertans who suffer injuries due to a collision currently wait months for a simple claim to be resolved and can wait years for claims related to more serious and life-changing injuries to addressed. Additionally, the medical and financial benefits they receive often expire before they’re fully recovered.
Under the new system, Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. Those who sustain serious injuries will receive treatment until they are fully recovered. These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act.
Work on this new auto insurance system will require legislation in the spring of 2025. In order to reconfigure auto insurance policies for 3.4 million Albertans, auto insurance companies need time to create and implement the new system. Alberta’s government expects the new system to be fully implemented by January 2027.
In the interim, starting in January 2025, the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs, increasing vehicle damage repair costs and natural disaster costs. This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta.
Albertans have been clear that they still want premiums to be based on risk. Bad drivers will continue to pay higher premiums than good drivers.
By providing significantly enhanced medical, rehabilitation and income support benefits, this system supports Albertans injured in collisions while reducing the impact of litigation costs on the amount that Albertans pay for their insurance.
“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province.”
Quick facts
- Alberta’s government commissioned two auto insurance reports, which showed that legal fees and litigation costs tied to the province’s current system significantly increase premiums.
- A 2023 report by MNP shows
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