Sunday, June 23, 2024

ACA Seeks Relief on Carbon Levy for Existing Contracts

On January 31 ACA sent a letter on behalf of the members who have expressed concern that the carbon levy will adversely affect their current contracts.

A number of Alberta contractors are parties to contracts in effect well before the carbon levy came in to effect January 1, 2017. These contracts involve various municipalities and other public entities which include contractual language to reimburse for a tax increase, where the impact of the tax can be clearly documented.

Suppliers and subcontractors are now passing along cost increases as a result of the imposition of the carbon levy, costs that were not possible to estimate at the time of bidding and subsequent contract award. Unfortunately, the rationale given is verbal but is not substantiated in writing. Anecdotal evidence suggests a cost increase on the order of 1-2% can be attributed to the carbon levy.

This situation should not apply to any contracts signed after January 1, 2017, indeed, the association prepared a bulletin in late 2016 advising members to account for the levy in their bidding. Alberta Construction Association urges the Alberta Government to develop a program to offset these cost impacts.

ACA would be pleased to meet with government to discuss the parameters of such a program.

The full letter can be found here.