Heat from the city's river valley power station distorts the CPKC trainline and the industrial plants in north of the city. The prospect of an end to the carbon tax on heavy emitters is intriguing to local officials, but not much will be decided until the results of the next federal election are in.--News File Photo
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Medicine Hat’s city elected officials and some of their biggest critics are welcoming a federal election promise to eliminate carbon fees on CO2 emitted from the city’s power plant, but council members and energy officials say the situation is still unsettled.
Medicine Hat Utility Ratepayers Association released a statement that they fully back a Conservative Party campaign promise to eliminate industrial carbon pricing that is an underlying factor in a city decision making related to the power business.
MHURA president Sou Boss told the News her group “is greatly disappointed in how (the city is) using these carbon taxes to justify massive multi-million taxpayer dollar investments in projects like the Saamis Solar Park without any public input or consultation.”
“(They have) clearly ignored the affordability crisis affecting our community,” she said.
This year, the city purchased the plan to build the solar array in the city’s north end, in part to offset carbon compliance fees at the gas-fired power stations, but officials have stressed that it will postpone a decision to dedicate major funds to the project until the economics make sense.
At the same time, the official position is to advocate for longest possible use of gas-fuelled generators.
Elected officials said this week more needs to be known before major decisions are made.
“There’s a lot of speculation and I’ll await how that unfolds,” said
Coun. Darren Hirsch, chair of the energy committee.
“When a party assumes that role of government, they’ll enhance it and they’ll put together a policy into something more than what’s just a platform promise right now.”
This week, Conservative Party Leader Pierre Poilievre said his party would eliminate industrial carbon levies to ease business costs and boost industrial activity while offering tax credits to develop technology to address climate concerns.
Liberal Leader Mark Carney has moved to cancel the consumer charge on carbon, but has also said industrial levies are essential to expanding trade deals to countries outside the continent.
A federal election must take place this year, but observers believe it could be called this month. If the federal charge is eliminated, the province would have to follow by eliminating its own decades-old industrial carbon pricing system.
“There’s a lot that’s still to be sorted out,” said Mayor Linnsie Clark following Monday’s city council meeting.
“We’ll remain flexible and determine our actions based on the actions of the other two levels of government.”
On Saamis or other spending at the power plant, “We don’t need to go back to the drawing board, but we will factor that back into any calculations that we’ve already done that had a basis on carbon pricing,” said Clark.
Division head Rochelle Pancoast said recalculating the economics or overall strategy likely would not be formally updated until after an election and a more-certain outlook for carbon pricing is known.
“Essentially our strategy is live considering the level of uncertainty,” Pancoast told the News.
“In business we need to be mindful of continual regulatory change on these more divisive areas, and we need to develop and continue strategies that withstand those changes. Political cycles can change as often as business cycles. We need to be mindful of the long-term.”
The City of Medicine Hat’s TIER fees totalled $12 million in 2024, but could rise steeply to more than $40 million per year by 2030 as standards and fees are both set to increase.
That was outlined four years ago by the city’s energy division as a cost that could threaten the viability of the 110-year-old business.
Top administrators presented an overview of the strategy last fall, stating the direction and spending decisions would depend on five unsettled issues.
They included federal regulations and carbon pricing in the electricity sector, which it noted could change dramatically depending on the outcome of the upcoming federal election.
Other factors include an ongoing provincial review of the Alberta power market (which could affect exports and profitability), and the city’s own financial reserves and debt position could limit or hasten action.
As well, planners are watching technological advancements that could bring down the cost of some options, or make others obsolete.
Those include adding renewable capacity, such as with an initial phase of Saamis, upgrading plants to capture carbon, or importing more power from the grid at potentially advantageous pricing.
