New Carbon Tax Added in British Columbia Budget

Canada to Introduce New Carbon Tax in Victoria, British Columbia

This week, government in British Columbia introduced the continent’s very first, complete carbon tax — the desired endgoal of which is to ultimately get residents of this part of Canada to reduce greenhouse-gas emissions significantly.

To make the pill a bit easier to swallow, the carbon tax will be ushered in alongside income-tax cuts, as well as a sizable dividend to taxpayers in the province. For her part, Finance Minister Carole Taylor has been quoted as saying, “We promised you green and today we delivered green […] If you start to change your lifestyle even modestly … you will have extra dollars in your pocket.” Some tough love, and some incentives to match.

In an interesting twist that may seem unrecognizable to many Americans just south of the province, the budget (leveling in at just under 40 billion dollars) not only increases spending on programs, but also increases debt. Further, experts have forecasted less than moderate economic growth, with levels as slow or slower than they have been since 2001.

Taylor went on to say, “This is an important turning point for British Columbia — and we think for Canada — because we are out in front on this,” thereby keeping the focus entirely on green movement over the typical politics of slumping economies, mounting debt and jobs.

So what does the new legislation look like in reality? Residents of the province can expect to immediately see what is being billed as a “climate-change dividend” to the tune of $100 a person. Residents will be receiving this payout by June, in the mail. The payout is designed not to impact one’s income drastically, obviously, but instead to lighten the load of the new energy tax that is set to go into effect the first of July.

The carbon tax itself will be applied to all fossil fuel consumption: diesel, heating fuel for the home, gasoline. The tax can also be expected to steadily rise every year until at least 2013 (the price of gas might increase in 2008 by 2.4 cents a liter).

Although the new tax is supposed to be revenue neutral, it does not account for other increased costs. This includes the forthcoming rise in British Columbia Hydro rates — the application is pending, but should it be approved, average households in the province can expect an additional $200 per year to be paid in increased energy costs.

Critics of the new legislation urge that because the new budget proposes that industrial emissions from the production of gas, cement, oil and various other sectors will not be subjected to the tax at first, that businesses are getting a break at the expense of working families and ordinary consumers..

The finance minister’s new budget attempts to attach a cost to greenhouse-gas emissions, albeit a figure that is low compared to the standard global market. However, British Columbia and Taylor’s government is the first jurisdiction in Canada to assign the new carbon tax, designed to discourage the rampant use of fossil fuels. The overall reduction benefit would kick in at the point where consumers abandon the use of fossil fuels, amounting to a three million tonnes reduction of greenhouse gases in the province from now until 2013. B.C. is set to eliminate a total of 40 million tonnes by 2020.

Sources report that the economic impact of the new green agenda amounts to some 167 million dollars in economic growth that has been lost as a result of new legislative measures. To further the green agenda, the new budget also features a section introducing consumers to the reality of how they can save themselves serious dollars by adopting a green lifestyle — walking instead of driving, weatherproofing the house to a higher standard and more.

Copyright 2008 Matty Byloos

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