The New Year kicked off with a new tax for Albertans designed to counteract climate change while encouraging the exploration of new industry within the province.

Prices at the pump increased by five cents per litre on Sunday morning. While motorists expected the hike, the carbon tax remains a tough pill to swallow for some Albertans.

“That's a little hard to hit in the wallet that's for sure,” said Randy Pearce. “I just don't understand why she spends $9 million on promoting this carbon tax.”

The Notley government spent millions to tout the tax as the most cost effective way to reduce greenhouse gas emission and it promises to invest all revenue from the tax into Alberta’s economy.

“While it's 4.5 cents today it's billions of dollars for our economy and economic diversification,” explained Sarah Hoffman, Alberta’s deputy premier, on Sunday in the Alberta Legislature Building.

Some are questioning the province’s timing.

“There's wage freezes as well and wage cuts, it's going to be a difficult year, 2017,” said Gary Belcher.

Many businesses are warning customers the trickledown effect of the tax will result in higher prices as the shipment of goods will cost more.

In addition to the levy of fuel for vehicles, natural gas, used to heat homes and businesses, will experience a jump in price.

Kris Palka, an oil and gas strategist, considers the carbon tax a blessing in disguise as it will encourage Albertans to seek out ways to live a lower emission lifestyle to save money long term. Palka points to recent trends in British Columbia as an example

“(They had) very good results,” said Palka. “People became more efficient with the stuff they use, it cost them less, with a 17% reduction of consumption.”

The provincial government maintains the average family will pay about $350 more each year  and roughly two-thirds of Albertans will receive rebates to offset the cost.

Jean-Luc Reicher says the tax is a small price to pay and considers the move a step in the right direction.

“I don't think it does enough,” said Reicher. “I think climate change is a serious problem and I don't think we're adjusting in the right ways. It's a start but there should be more.

Carbon levy rebates will be determined by household income.

With files from CTV’s Alesia Fieldberg