Alberta files federal court challenge to Canada carbon tax exemption

(Reuters) - Canada's main oil-producing province Alberta has filed a federal court challenge to Ottawa's carbon tax exemption for home heating oil, arguing it is unconstitutional and unlawful, the Alberta government said on Tuesday.

WHY IT MATTERS

The court challenge from Alberta's conservative government, which frequently clashes with the federal Liberals on climate and energy issues, is the latest attack on the consumer carbon tax ahead of a federal election due to take place within the next year.

Opposition Conservative leader Pierre Poilievre, whose party is polling far ahead of Trudeau's Liberals, has vowed to "axe the tax" if elected.

CONTEXT

Canada's consumer carbon tax, intended to help cut climate-warming emissions, has become increasingly unpopular among voters and politicians, who claim it adds to high living costs despite the revenue-neutral policy returning money to most Canadians in the form of rebates.

Prime Minister Justin Trudeau's Liberal government announced a three-year carbon tax exemption for home heating oil last year, measures he said were intended to relieve affordability concerns.

The move drew widespread criticism from a number of provincial premiers, who said it unfairly benefited voters in Atlantic Canada where home heating oil is more widely used, and climate advocates who argued it undermined the policy.

KEY QUOTES

"Alberta strongly opposes the federal carbon tax exemption on heating oil, as the federal government is no longer creating minimum national standards that apply evenly across the country, and is instead creating a regime that favors one region and fuel type over others," the provincial government said in a statement.

BY THE NUMBERS

Canada's carbon tax is currently C$80 a tonne, and will increase by C$15 every year until it reaches C$170 a tonne in 2030.

(Reporting by Nia Williams in British Columbia; Editing by Marguerita Choy)