Alberta suing feds over carbon tax exemption on home heating oil

The Alberta government is suing Ottawa over the exemption of the federal carbon tax on home heating oil.

Premier Danielle Smith says the province applied for a judicial review on Tuesday. Alberta is asking the courts to declare the exemption “unconstitutional and unlawful.”

“Given the cost of living challenges many households are facing, piling more financial burden onto Canadians is simply cruel and punitive,” the premier said.

The UCP is arguing the levy is only advantageous to some parts of Canada, and is accusing the federal government of “creating a regime that favours one region and fuel type over others.”

Home heating oil is mainly used in Atlantic provinces, where as many as 40 per cent of homes use it. In Alberta and the rest of the west, that number is closer to one per cent.

Whereas home heating oil received a three-year exemption, fuels used in other regions did not. Alberta is calling it a double standard.

RELATED: Saskatchewan and Alberta premiers ask for extension of carbon tax exemption

“While we’re happy for these Canadians, Alberta, Saskatchewan and other provinces who heat their homes with natural gas have been deliberately excluded from these savings,” Smith said at a news conference Tuesday alongside five ministers.

“Albertans simply cannot stand by for another winter while the federal government picks and chooses who their carbon tax applies to. Since they won’t play fair, we’re going to take the federal government back to court.”

Smith says the carbon levy is increasingly contributing to financial pain, but Prime Minister Justin Trudeau’s Liberals say it puts money back into the pockets of Canadians in the form of rebates. The move from the Liberals was widely criticized as politically motivated, bad for the environment, and a show of favouritism to voters out east.

“Whatever their reasons, the outcome is blatantly unfair to people in Alberta and other parts of Canada who use natural gas and other fuels to stay warm in the winter,” Smith said.

Why the lawsuit now?

Alberta Justice Minister Mickey Amery says it took about a year for the province to assemble its legal argument and he expects it to take another year to work its way through court.

But the NDP believes the lawsuit is all about the premier trying to gain last-minute votes for her UCP leadership review on Saturday. Leader Naheed Nenshi says instead, he would try to negotiate a similar carveout for Albertans.

“This is this premier. She doesn’t want to win. She just wants to fight,” Nenshi said. “And so she’s trying to drag out a court case for as many years as she can, so she can show she’s fighting.”

A political strategist agrees the lawsuit is aimed at appeasing UCP supporters – but says it’s a smart move.

“This is something that is tried and true for the conservative party. They keep going back to the well, as you mention it. It keeps their base happy, it’s good for their fundraising, it’s good for their talking points,” said Tom Vernon, with Crestview Strategy.

The federal justice and environment ministers issued a statement to CityNews saying home heating oil was exempt because it’s already much more expensive than natural gas, and they have no plans to change course on the carbon tax.

They allege Alberta’s lawsuit is a “political stunt” ahead of the premier’s leadership review.

–With files from The Canadian Press