Juno News - June 29, 2026


Economist EXPOSES the hidden cost of Carney’s carbon tax

Mentioned
Jack Mintz Mark Carney Chris Sims
Is Carney's condo bailout dead？ Trudeau admits he was WRONG on mass immigration

Episode Stats


Length

26 minutes

Words per minute

161.46

Word count

4,232

Sentence count

83

Harmful content

Misogyny

1

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

In this episode, we talk to Jack Mintz, the President of the School for Public Policy at the University of Calgary and a Fellow at the Fraser Institute, about the impact of Alberta's Industrial Carbon Tax on the extraction and production of natural gas, oil and natural gas.

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00 Welcome to The Fighter. I am your host, Chris Sims. We have got a very insightful interview
00:00:10 for you coming right up in a second. Why? Well, because to put it in plain English,
00:00:16 if we continue along this path with strangling our natural resources, with having a huge
00:00:22 industrial carbon tax, with our current taxation plans that we have here in the heartland of the
00:00:29 economy known as Alberta, it will have a ripple effect on affordability. How well, to put it in
00:00:37 layman's terms, it will make our cost of production for things like natural gas, a barrel of oil,
00:00:44 and even electrical power cost too much. Costs too much in comparison to places like Texas and New
00:00:54 Mexico. Bottom line, this would increase costs for businesses, things like mining, things like
00:01:03 forestry, things like farming, things like fuel refinery, not to mention the direct oil and gas
00:01:10 industry. And it would increase costs for consumers. So when you're paying your power bill,
00:01:17 okay, if we stick with this ever-increasing industrial carbon tax that's embedded within
00:01:23 the Memorandum of Understanding, the MOU, the one that Prime Minister Mark Carney is pushing
00:01:28 really hard, okay? If we stick on our current track, it's gonna cost us more. Don't take my
00:01:35 word for it. Dr. Jack Mintz said this himself in a deep dive, far-ranging report. Let's listen.
00:01:45 Joining me now is Dr. Jack Mintz. He is the President's Fellow of the School for Public
00:01:50 Policy at the University of Calgary. He is also with the Fraser Institute and that's where I took
00:01:56 a look at this report that he wrote. It's more than 40 pages long. I strongly recommend people
00:02:02 go check this out. Dr. Mintz, what jumped out at me was the potential increased production costs
00:02:09 of everything from oil sands, oil, all the way through to natural gas. But before we get going,
00:02:16 some of the language in here, it wasn't just industrial carbon tax or carbon capture. It
00:02:22 includes things like business taxes. Can you explain to us what all things you considered
00:02:28 here as factors? Well, first of all, for years, in fact, it goes way back to 1984 when I first
00:02:35 went up to the Department of Finance. One of my tasks was to help the department develop what's
00:02:40 called effective tax rate analysis on new investment or marginal effective tax rates,
00:02:47 which is now commonly used. In fact, the department still uses that methodology for looking at how
00:02:54 taxes can impact investment and for comparing Canada to other jurisdictions. And so that
00:03:01 analysis includes, and I've been doing this for quite a long time, but we include corporate
00:03:08 income taxes not just the rate but also the base in terms of how you depreciate capital investment
00:03:14 tax because it's all the different aspects of the corporate income tax and we also include sales
00:03:19 taxes on capital inputs which is which you get with things like the retail sales tax on capital
00:03:26 inputs some jurisdictions have other types of sales taxes as well then we have then we also
00:03:34 look at taxes that are related to using assets you know for example canada one time had capital
00:03:42 taxes it still applies to financial institutions but other companies no longer pay it but you'll
00:03:48 find that also in a number of countries and an economy model also is a property tax which
00:03:54 we tend not to use a property tax not because we don't think it shouldn't be used it's just that
00:03:59 it's very hard to get data for canada on taxes paid by different sectors of the economy when it
00:04:06 comes to property taxes municipal property taxes particularly but generally all you know and it
00:04:11 includes a whole gambit of taxes on on capital inputs the trouble however is that when you're
00:04:17 doing analysis and you want to go beyond just taxes on capital you want to include something
00:04:22 like taxes on energy like fuel taxes which have been around a very long time uh we um
00:04:29 you really have to use a different type of analysis you don't just try to measure the
00:04:34 tax on capital but you also try to measure the tax on on energy and you can also measure the
00:04:40 tax on labor if you wanted to do that as well so there's a broader sense of how taxes can affect
00:04:47 what's called cost competitiveness and that's what we do and so we include uh in just the base case
00:04:53 fuel taxes we compare texas and new mexico with with alberta in terms of the taxation of
00:05:03 the resource sector oil gas sorry oil oil sands natural gas but also the power industry that
00:05:11 tends to use a lot of energy and produces energy as well and so we look at how these taxes
00:05:18 impact on on the cost and cost competitiveness and and that is really critical if you want to
00:05:25 understand how taxes impact on production decisions of businesses and of course the
00:05:30 higher the taxes the less production you're going to get which is which is what you would normally
00:05:36 think will happen so business taxes include not only the taxes like the corporate income tax but
00:05:42 also includes other taxes and capital and includes fuel excise tax on energy and then we add in
00:05:49 carbon taxation on top of that can you get into the industrial carbon taxation uh because to
00:05:56 paraphrase because i can't put it the way you put it um to paraphrase your report you said the the
00:06:02 current one, the current industrial carbon tax rate before the MOU was still competitive. It's
00:06:09 still allowed for our price of a barrel of oil or production cost of a barrel of oil to be
00:06:14 competitive. And then from what I'm understanding from your report is going forward, the new
00:06:21 increasing industrial carbon tax costs combined with the cost of carbon sequestration and carbon
00:06:26 capture etc all in the mou would help make the production cost of a barrel of oil too high in
00:06:35 alberta compared to places like you said new mexico and texas have i got that right um not quite
00:06:42 that's why i had you on the show yeah so the exercise is uh first of all uh to understand
00:06:48 tax competitiveness what we and this is very commonly done uh by by analysts including myself
00:06:54 and others is you try to try to see whether your tax system is tax competitive which is a little
00:07:01 different than just competitive and the reason i say that is that we isolate the tax system by
00:07:08 assuming the same type of other economic variables for production in in in the various jurisdictions
00:07:17 so in other words they're using the same uh structure of debt versus equity they're using
00:07:22 the same uh you know they have the same sort of costs that would otherwise be there um you know
00:07:28 uh you know in producing the product so uh so in that sense uh what we're the focus is on what's
00:07:35 called tax competitiveness and so not just competitiveness but tax competitiveness in
00:07:40 other words which jurisdiction tends to tax more heavily um you know an industry or sector uh
00:07:47 compared to other jurisdictions and so uh what we do is we do that with the with the concept that
00:07:54 all else is equal now of course all else is not equal you can get different costs and for example
00:08:01 wage costs in canada would be less than the united states uh and so it's possible to for the system
00:08:08 to be not competitive um let's say in alberta relative to texas but it doesn't mean that the
00:08:16 whole industry is not competitive it may be that there's some other advantages that you know that
00:08:22 is possible that that still maintains competitiveness what's important about tax
00:08:27 competitiveness is we want to know how the tax system including subsidies by the way how that
00:08:32 can impact on on consumers and on the decision where to produce between jurisdictions and of
00:08:39 course if all else is equal but your tax system tends to make costs higher in the jurisdiction
00:08:46 then that's a tax disadvantage that has to be considered but there could be other advantages
00:08:51 that might be relevant but that's not what's the point of the analysis the point was to look at
00:08:57 whether the tax system is still advantageous in canada relative to the united states and is it
00:09:05 well i mean this is the issue that i've been very interested in for a number of years actually
00:09:10 um in fact you know i've done a lot of work on comparative analysis lately uh philip bezell who
00:09:16 works with me uh quite closely we've been doing a lot of work for the inter-american development
00:09:20 bank on mining taxation around the world and comparing canada with that and uh it's typically
00:09:27 you know the work that you know we've done in the past you know where we include royalties
00:09:31 and taxes just like we've done in this study but i've always sat and wondered uh what about
00:09:38 carbon taxation because carbon taxes are levied in canada but they're not levied in the united states
00:09:45 and the question is like you know to what extent is that putting us offside relative to the united
00:09:50 states or not and that's the reason i was very interested in this topic was to was to see how
00:09:57 you can introduce carbon taxes into modeling uh cost competitiveness between jurisdictions and
00:10:04 and so the results that we got i think are quite interesting i mean if you first of all forget
00:10:09 about the industrial carbon tax for a moment and you just look at fuel excise taxes on the energy
00:10:16 and you look at the other taxes on the capital what we found actually was that actually there
00:10:21 was a tax advantage for investments in alberta relative to texas and and and new mexico which
00:10:29 is the other major producer of oil in the United States. Of course, there's other states too,
00:10:34 but we focused on two of them. And that's kind of interesting, and of course, the question is why.
00:10:41 And one of them is, first of all, Alberta lowered its corporate income tax rate,
00:10:44 its provincial one to 8%, the federal one is 15%, it's 23%, which is roughly in keeping with Texas,
00:10:54 which is at 21, and New Mexico, which is a little bit higher, close to the Alberta rate.
00:11:01 But the key point is that when you look at other things, like other taxes,
00:11:08 Texas has a gross receipts tax.
00:11:11 They have these very high severance taxes on the oil and gas sector.
00:11:15 Same thing with New Mexico.
00:11:17 And they also have retail sales taxes, which are very significant taxes on business inputs.
00:11:23 and the interestingly not it's not a major factor but i was surprised i actually feel excise taxes
00:11:29 they're a little higher in new mexico and texas compared to alberta so when you put it all
00:11:34 together actually alberta had a tax advantage relative to texas and new mexico and i think
00:11:39 that's that's quite interesting so then the big question is okay what happens if you put in the
00:11:44 industrial carbon tax and there we found that actually at 95 dollars what happens oh first of
00:11:50 well, I should backtrack, with the case of just looking at these taxes
00:11:56 and ignoring the carbon taxes, there is one sector that is more heavily taxed
00:12:01 compared to Texas and New Mexico, and that's conventional oil.
00:12:05 And that's because of the very high royalty rates in Alberta.
00:12:09 So that was one factor that's disadvantaged from a tax perspective in Alberta
00:12:18 before you get into carbon taxation.
00:12:21 Now, once you add in the carbon tax,
00:12:23 obviously, since there's no carbon tax in the United States,
00:12:28 conventional crude is even worse off relative to Texas and New Mexico.
00:12:34 But then what happens to the oil sands?
00:12:36 Well, we found actually there was a tax advantage
00:12:39 for oil sand investments without the carbon tax.
00:12:43 But once you bring in the carbon tax,
00:12:45 most of the, at a $95 per ton carbon tax, most of that tax advantage is gone. So, at least under
00:12:53 the 2025 system, as we called it. And so that, I think, is important to understand. Natural gas
00:13:00 still has an advantage, mainly because of these very high severance taxes that are in Texas,
00:13:06 particularly. So, you know, that part stays the same. The one industry that is really out of
00:13:13 whack is the power industry it had a tax advantage without carbon taxation but once you introduce
00:13:18 carbon taxation even the the one that we currently had in alberta uh it it put uh power investments
00:13:26 offside now utility companies aren't going to move very quickly so i don't think that's a key issue
00:13:32 but it does mean that our tax system in alberta once you put in the carbon tax means that
00:13:39 you know probably consumers and businesses that are going to buy electricity
00:13:44 and you know electricity that are going to be taxed more heavily and will have face higher
00:13:49 prices as a result which goes right through the whole economy so it's a it's a bit of a concern
00:13:54 when you have that happening and then we looked at the old system by the way the paper was
00:14:00 originally written before the mou came out so we had something at the very end about the mou
00:14:06 which of course attracted a lot of the interest um but when we when we looked at the 170
00:14:12 dollar carbon tax that was due in 2030 um uh and uh and further uh reductions in you know in
00:14:20 allowances um although assuming that there would still be a low credit rate uh um you know for
00:14:26 selling carbon credits uh to companies that need to buy them to satisfy their their carbon uh
00:14:32 require you know uh their the carbon regulation in alberta uh what we found actually was that
00:14:40 the oil science loses its good tax advantage altogether not to it's not too badly off relative
00:14:47 to to the uh to the u.s uh but um uh obviously conventional crude is worse off natural gas
00:14:55 starts losing its tax advantage too although still has some tax advantage under that system
00:15:02 then the mou came along and we decided to look that now it wasn't easy because you didn't have
00:15:10 the same amount of time before this paper coming up but after going through it what we found is
00:15:15 that by 2040 after the carbon price moves up from 95 to 140 dollars and uh and the car and there's
00:15:26 this minimum credit price which is going to be make the carbon tax even higher as a result plus
00:15:35 further reduction in allowances that would be available to the companies that what we found
00:15:43 actually is pretty well in every sector there'll be a tax disadvantage for them and as a result
00:15:51 to and in particular the power industry was going to be most effective and so that would suggest
00:15:57 that you know that certainly the you know that certainly the industrial carbon taxes
00:16:02 was going to create a now a tax disadvantage for alberta while previously without carbon taxation
00:16:09 there wasn't a tax advantage so that's the basic story of the whole report is it okay if i bring up
00:16:16 this graphic now and we can talk about that a little bit yes we can perfect sean if you can
00:16:21 pull this up uh dr mince uh these are some big numbers that i'm looking at here um so we've got
00:16:28 a 19.6 increase in the cost of production for oil sands oil 25.6 increase for conventional oil
00:16:38 this is a wowser 35.9% for electrical power and 39.1% for natural gas. So we're talking electrical
00:16:49 generation here at 35.9 and then almost 40% for natural gas. Now, can you break that down for us?
00:16:56 I don't know if we need to keep the graphic up while you describe it. Is this how would this
00:17:01 increase costs to consumers if this is an increased cost of production?
00:17:07 well we have to remember that uh before the carbon taxation came in place we did have taxes on on
00:17:13 these businesses and in fact uh you take like the case of natural gas and i don't have the numbers
00:17:18 in front of me right now but uh you know the effect of tax rate was around 23 24 percent
00:17:25 so the carbon tax actually adds something on but they started a very high high rate in the first
00:17:30 place um part of a part of the issue is that uh the carbon tax is paid no matter what your
00:17:36 profitability is um you know you could have high profits or low profits and and one of the issues
00:17:41 around with natural gas is that prices are relatively low you know very relative to what
00:17:46 you can get in the united states so that's uh so that carbon tax really bites more heavily
00:17:52 in that case uh because the because of that um and so that's you know that's something to uh
00:17:59 you know it has to be kept in mind um but with the uh uh and power you know obviously is another
00:18:06 area where we've had actually low prices for consumers in alberta at least relative to number
00:18:11 of jurisdictions around the world uh but uh again uh those taxes tend to pile on uh more heavily
00:18:19 when your prices are low and your costs are low in other words you know because it's a fixed tax
00:18:24 it doesn't it's not related to the actual cost per se and so and so that's why that's one of
00:18:30 the reasons why those sectors tend to get more heavily impacted but i think the other graph if
00:18:38 would be the op-ed i put out today in the in the national post where you where there's a table
00:18:44 comparing texas and new mexico under the mou for 2040 compared to alberta for the oil sands and
00:18:52 conventional crude natural gas and power and you can see quite clearly there that
00:18:59 the tax advantage is really quite significant in fact it's much higher in alberta it's almost
00:19:04 twice higher than what you now find in in new mexico and texas more than twice higher except
00:19:11 for the oil stats it's not too far off the the texas and the and the new mexico tax rates
00:19:17 and so you're getting you're you really see some significant differences now of course that's by
00:19:25 2040 the world's going to change a lot between 2025 and 2040 most likely but it does tell you
00:19:35 the direction and of course when companies are making investment decisions they're they're
00:19:40 looking at the long run they're looking at many many years in terms of profitability and if they
00:19:46 see that in 15 years they're going to be you know much higher taxes in canada relative to the united
00:19:53 states it's going to probably put a just you know probably discourage investment in in canada uh as
00:20:01 a result because the the future looks more gloomy at least from a tax perspective it doesn't mean
00:20:08 that there's other things that will be positive for the industry in canada is it fair to say and
00:20:14 i don't want to put words in your mouth is it fair to say then under the current system if things
00:20:18 don't change looking into the future down a railroad track that this would increase cost
00:20:23 of production of various forms of energy and increase cost to consumers is that fair to say
00:20:29 yes and to increase cost to businesses that are buying energy right i mean we have to remember
00:20:35 you have forest companies that have to use uh you know uh fuel that they they buy the energy sector
00:20:42 You have even, you know, high-tech industries that depend on electricity, et cetera.
00:20:48 So yes, what this is saying is that you're going to have prices going up for consumers,
00:20:55 but it's also going to make other businesses in the economy less competitive.
00:21:00 Are you getting traction with the Alberta government, if you don't mind me asking?
00:21:03 Because I've brought some of this stuff up myself with the Alberta government and it just kind of
00:21:08 seems to be glossed over and they say the mou is worth it and we'll work it out later
00:21:13 um whereas some of these numbers i'm looking at here like 35.9 increase in the cost of production
00:21:22 for electrical power in alberta you know like that's alarming um and for folks who are outside
00:21:28 of alberta who are used to hydro um our power is generated using natural gas largely here in alberta
00:21:34 so that is why those two things would be connected i would argue these are alarming numbers like are
00:21:40 you are you getting some feedback from the alberta government with their mou and their industrial
00:21:45 carbon tax and all this stuff uh well they certainly know this work uh let me put it that
00:21:51 way um yeah but i think uh i think the more interesting thing and i've heard this from not
00:21:57 only you hear it publicly but i've heard this from a number of people privately including people who
00:22:02 reacted to the study that came out yesterday who are in the industry it basically confirms what
00:22:07 they've been trying to tell the alberta government as well now but you have to be really careful is
00:22:13 those those numbers there don't say that the price of prices are going up 35 percent just
00:22:22 the carbon tax correct what it means is that taxes are adding on to the marginal cost of production
00:22:29 for um for the for that industry and and adds another third to the cost so for example if you
00:22:37 can sell electricity let's say at 10 cents a kilowatt uh taxes are adding three cents on to
00:22:46 that 10 cents you know three point three point five cents onto the 10 cents and and so that that's the
00:22:53 way to look at those numbers okay well dr jack mince i sincerely appreciate your work on this
00:22:59 i hope that you're ringing some bells up there in edmonton and that people are paying attention to
00:23:03 this because uh at the end of the day people are strapped they can't afford to spend more for
00:23:08 energy and i really appreciate your insights especially on business so the big business in
00:23:14 oil sands or oil and gas electricity energy something like that mining um is looking to
00:23:20 come to Alberta and they're looking 10, 15, 20 years down the road and they're doing a comparison
00:23:25 shot between Alberta and Texas. From this report, what I'm reading is Alberta would be at a
00:23:32 disadvantage, correct? A tax disadvantage. It doesn't mean there may not be some other advantages
00:23:38 that goes Alberta's way. Including our charming personality. Dr. Mintz, thank you so much for 0.78
00:23:46 your time today my pleasure thank you take care once again that is dr jack mince he is an obviously
00:23:54 an economist super smart gentleman and he is the president's fellow of the school for public policy
00:24:00 at the university of calgary and it's really important that we speak with documents because
00:24:07 a he's obviously very smart b he does a lot of completely non-partisan deep dive look at the
00:24:16 numbers look at the future look at all these variable rates and he puts it all into a report
00:24:22 that ding ding ding government can't ignore and industry reads so while you're often going to get
00:24:30 a 10 second clip somewhere else we think it's important here in independent journalism to do
00:24:36 long-form interviews with very intelligent people like dr mints please head on over to the fraser
00:24:42 Institute's website. It's one of the first links you can find on their website. If you just Google
00:24:48 Jack Mintz report, it'll usually be one of the first things that pops up. I think the C.D. Howe
00:24:54 Institute has also posted it. It's on many different websites. And take a look at the
00:24:58 executive summary. And that's where you can see charts like this, okay, where they're talking
00:25:04 about tax disadvantages. And then talk to your friends, especially those who plan long-term in
00:25:11 business, who want to create jobs here in Alberta and Canada, and who ultimately, from the Taxpayers
00:25:17 Federation perspective, want lower taxes. Like Albertans, a huge chunk of Albertans are fighting
00:25:25 to afford everyday life. The idea of making something as simple as oil and gas, fuel refineries
00:25:33 cost more, power production costs more, ultimately trickling down to you spending more on your power
00:25:39 bill. We can't afford this, folks. And that's the message that the Alberta government needs to hear
00:25:46 in clear playing language like Dr. Mintz just gave us. Thank you so much for watching. If you
00:25:51 haven't done so yet, be sure to head on over to Juno News. Subscribe to Juno News because that's
00:25:57 where you get unvarnished direct independent journalism. And hey, if you're watching this on
00:26:02 YouTube, why haven't you hit the like button yet? So hit the like button, subscribe to this YouTube
00:26:07 channel, and most importantly, share this show with people who need to know.