Avail CPA | Tax News
Alberta Carbon Levy (Tax)
Alberta’s new carbon tax that received royal asset on June 13, 2016 and came into effect on
January 1, 2017. You’ve probably noticed the spike in gas prices at the pump. What does this
mean for you as a farmer?
Impact on Farmers
Marked fuel used for farming is exempt from this new carbon levy through the same Alberta
Farm Fuel Benefit that gives you the 9₵/L provincial fuel tax exemption. This is a 5.35₵/L (going
up to a 8.03₵/L in 2018) savings on diesel and a 4.49₵/L (going up to 6.73₵/L in 2018) on
gasoline compared to what you would pay at the pump on unmarked fuel.
Your Alberta Farm Fuel Tax Exemption Certificate now doubles as your Carbon Levy Exemption
Certificate, so there is nothing you need to do to get this exemption on your marked fuel. Note,
however, that marked fuel used for other qualifying off-road uses is not exempt.
There is no exemption for aviation fuel unless it is for a flight that originates or ends outside of
Alberta.
Biofuels – including biomethane, biodiesel and ethanol – also have exemptions available. The
exemption for ethanol and biodiesel will be administered through lower rates on gasoline and
diesel, meaning there is nothing you need to file or do for this exemption: it just will not be
applied on these fuels.
There is no carbon levy on electric utilities. Though the levy may affect the electric utilities
input costs and therefore the prices of electricity, the levy does not directly apply to electricity.
This is meant to encourage more green production of electricity through wind turbines, hyrdoelectric and solar.
However, you will notice an increase in your heating utilities as a result of the levy such as
natural gas (1.011$/GJ in 2017 up to 1.517 $/GJ in 2018) and propane (3.08₵/L in 2017 up to
4.62₵/L in 2018), for which there is no exemption available.
Reduced Corporate Tax Rate
To help businesses adjust to the carbon levy, Alberta’s small business corporate income tax rate
was reduced from 3% to 2% effective Jan 1, 2017. This will not affect unincorporated farms or
business, but for incorporated business in Alberta this will mean a new combined corporate tax
rate from 13.5% down to 12.5%.
Carbon Rebate
Couples, families and single parent families who have a family adjusted net income less than
$95,000 or single individuals with net income less than $45,000 will get a full carbon rebate
which amounts to $200 (increasing to $250 in the second year) for the first adult, $100
(increasing to $125 in the second year) for the spouse (or 1st child for a single parent), and $30
(going up to $37.52 in the second year) per child (for the first 4).
The amounts actually received in the first “year” is only half the amounts noted above as the
benefit year is only January – July (6 months) based on your 2015 tax return and likely has
already been received in a lump sum in January. The second “year” is the first full year of the
benefit and will be received in four equal payments each quarter July 2017 to June 2018 based
on your 2016 income tax return.
At family income above those limits the rebate quickly drops off to nothing at approximately
$104,000 for families or $53,000 for single adults. This rebate is designed to reduce or eliminate
the burden of this levy on the lower and middle class Albertans, focusing the burden of the levy
on the upper class and corporations.
Additional Information
For further information on how the Alberta Carbon Levy applies to you as a farmer you can visit
http://www.agriculture.alberta.ca/ or http://www.finance.alberta.ca/. Finance Alberta will also
provide more information on the levy in general for other purposes or situations as well as the
carbon rebate. This is also the website where you will find forms required to file for a rebate
(for example, if unmarked fuel was purchased for farm use in a situation where marked fuel
was not available for some reason) as well as other registration forms.
If you have any specific questions you can’t find the answers to you can contact Alberta Tax and
Revenue at 780.644.4300 or [email protected], or as always you can contact your
Avail CPA accounting team.
Claresholm
403.625.4448
Fort Macleod
403.553.3355
Lethbridge
403.382.6800
Milk River
403.647.3662
Pincher Creek
403.627.5510
Taber
403.223.0056
Vauxhall
403.654.4060
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