Thursday, June 2, 2016

Alberta's Carbon Tax Limited to In-Province Flights

The Canadian province of Alberta will introduce a tax on carbon beginning in 2017. Policy details have emerged over the past few months, and we have now learned how the tax will be applied to aviation. With the likely intention of avoiding the arguments about extraterritoriality that embroiled the EU's attempts to incorporate aviation into its carbon scheme, Alberta has decided to only levy the tax on flights between Albertan cities, such as Calgary to Edmonton. This should eliminate the possibility of a legal challenge from Canadian carriers objecting to being charged for portions of flights over other Canadian provinces, arguments that would mirror those used by the U.S. carriers in their suit against the EU. Foreign airlines will not be affected by the tax at all, given the lack of cabotage rights necessary to fly between two Canadian cities. Alberta has, however, expressed a desire to link its carbon policy with other provinces that adopt similar measures, leaving open the possibility that the tax could eventually apply to flights between Alberta and, for example, British Columbia once its' planned carbon tax is in effect.

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