A new Fraser Institute study by Jack Mintz finds that Canada's industrial carbon tax raises the marginal cost of producing oil sands crude to $75 USD per barrel at the current $95 per tonne carbon price. That is well above the cost in Texas or New Mexico, wiping out Alberta's previous tax advantage for attracting energy investment. The study compares marginal effective tax rates across Alberta, Texas, and New Mexico for oil, natural gas, and electricity. The findings come as Ottawa and Alberta push a one million barrel per day West Coast pipeline, but only Pembina Pipeline Corp. has signed on with a 10 percent stake. No oil producers have committed to shipping yet. The carbon price also hits electricity hardest, with Alberta's maximum marginal effective tax rate on power reaching 137 percent by 2030 under the original track. Even with the recent MOU that slows the carbon price increase to $140 per tonne by 2040, the study says Alberta's tax advantage is effectively gone.
