Carbon tax could cost town $29,000

The provincial government's carbon tax could cost the Town of Olds about $28,800.

That's the estimate provided by interim chief administrative officer Rick McDonald and the town's chief financial officer Garth Lucas.

The carbon tax (the Alberta government prefers the term "carbon levy"), took effect Jan. 1. Emitters pay $20 per tonne of CO2 (carbon dioxide) they emit. That rises to $30 per tonne by 2018. Analysts say the tax has added 4.5 to five cents a litre to the cost of gas at the pump.

"We figure it's going to cost about $28,800, $29,000 on our electrical, power, natural gas and so forth; all of our equipment in all of our buildings," McDonald said during an interview with the Albertan.

But he said that doesn't mean taxes will have to be hiked further to cover that cost. McDonald said it's his understanding that cost has already been factored in when the town hammered out its tentative budget.

McDonald stressed that figure is just a guess. The town will know its precise impact after the bills come in over the next few months.

"We broke it down; we had a good look at it. I mean, this is our direct impact. Obviously there'll be indirect impacts throughout town," he said.

Lucas and McDonald say the obvious impact of the tax is on town costs for heating and fuel for its vehicle fleet.

There are indirect costs too, McDonald said.

"Every time you buy a part there's some kind of relationship to the tax, because the truckers had to truck it in. There's a trickle-down effect on everything we do," he said.

"We don't know what that impact is. It probably won't be that great, compared to what our gas and oil and natural gas is."

Lucas said the harder part is figuring out what the impact will be on the town's electricity costs.

"Electricity, it's a product that uses natural gas but there's no specific tax on electricity - at least, not yet. And so, just like the tax on diesel is going to have an impact on food and on everything that you and I as a consumer touch, we don't know what those costs are going to be.

"Now for things like heating, we know what the natural gas tax is. They've given us a price for what it is per gigajoule for natural gas and per litre for fuel and for diesel.

"That's an easy decision to make because we know what we're dealing with. But for the electricity, we don't know yet," he added.

McDonald and Lucas said the town is doing what it can to reduce the impact of the carbon tax.

"I mean, we'll cut back on whatever we can cut back on. That's certainly the commitment everyone's made in the town," McDonald said.

"We could park some vehicles. There's not a lot you can do. Your power plants at the rinks and your heat in the buildings, you have to have those. I don't know what else you could do," he added.

McDonald said there'll probably be some impact on the Olds Aquatic Centre, but it still has to operate.

"It's difficult to make a profit on a swimming pool anyway. Obviously it's a social enterprise that needs to be operated and we'll have to maintain that somehow," he said.

Lucas said the town is looking at reducing its electricity costs by replacing fluorescent lights with more energy-efficient LED lights. However, at the time he was interviewed, town officials had not made a solid decision to do that.

"We haven't decided to do that but we've been discussing it and talking about it and we've done some experimentation with it," Lucas said. "You know, does it still give us an adequate light level and so forth?"

"The impact on electricity is not known yet. I mean, I'm positive electricity is going to go up, but nobody knows how much yet, and so we don't have the information that we need yet to determine whether it would be cost-effective or not," he said.

He predicted the town will make a final decision on that route in the next year or year and a half.

McDonald and Lucas noted a couple of years ago, the lights at the Sportsplex were replaced with LED lights.

"It's an absolutely fantastic success. It's way brighter than what it used to be and way less money than what it used to be," Lucas said.