Alberta Government Announces 2016 Budget

On April 14, the Alberta Government announced Budget 2016, The Alberta Jobs Plan. The budget has four key pillars: supporting families and communities; investing in infrastructure; diversifying the energy industry and energy markets; and supporting Alberta businesses.

 

Budget 2016 includes the Climate Leadership Plan (CLP), an economy-wide strategy for reducing greenhouse gas emissions. The CLP imposes a price on carbon emissions, implemented through a carbon levy that will act as the key tool to pay for a greener, more diversified economy.  It will be included in the price of all fuels that produce GHG emissions when combusted. These include transportation and heating fuels such as diesel, gasoline, natural gas and propane. It will not apply directly to consumer purchases of electricity.

 

Starting January 1, 2017, the carbon levy will be applied to fuels at a rate of $20/tonne. One year later, the levy will increase to $30/tonne. The carbon levy rates for propane will be 3.08 cents per litre starting January 1, 2017 and will increase to 4.62 cents per litre starting January 1, 2018.

 

Over the next five years the carbon levy is projected to collect $9.6 billion, which will be reinvested into Alberta’s economy. $6.2 billion will be spent on diversification of the energy economy and creating jobs, including: 

• $3.4 billion for large scale renewable energy, bioenergy and technology
• $2.2 billion for green infrastructure like transit
• $645 million for Energy Efficiency Alberta, a new provincial agency that will support increasing energy efficiency for homes and businesses 

In addition, the Petrochemical Diversification Program (PDP) will encourage investment in Alberta’s petrochemical industry and add value to Alberta’s energy products. The PDP includes up to $500 million in royalty credits for petrochemical projects, specifically methane and propane upgrading facilities.

 

The full budget is available on the Government of Alberta website.