LASER TALK: The BC Carbon Tax

The province of British Columbia (BC) enacted a revenue-neutral carbon tax in 2008 [1]. It has been touted as “the most significant carbon tax in the Western hemisphere” [2]..

Between 2008 and 2013, BC sales of fuels subject to the tax  dropped by 15.1% while the rest of Canada’s per capita sales have increased by 1.3%.[2] Per capita, British Columbians emitted 12.9% fewer greenhouse gases between 2008-2013 compared to 2001-2008. [2]For the economy, BC’s GDP growth actually outpaced (by a little bit) the rest of Canada’s after the tax was imposed, which is in line with evidence from seven other countries with similar policies that have had neutral or slightly positive effects on GDP.[2]

So how does the BC tax shift work? The tax applies to almost all fossil combustion in the province, or 77% of emissions, with the rate initially set at $10 per carbon ton. It rose by $5 per ton per year until it reached $30 as of July 1st in 2012. This tax is revenue neutral with income applied to personal income tax cuts, corporate tax cuts, low-income tax credits and the Northern and Rural Homeowner Benefit.[1]

A 2013 poll showed that 64% of British Columbians are in support of the policy. The same poll found that the percentage of British Columbians strongly opposing the taxes is at an all time low of 17%.{3}

The Liberal government in BC was re-elected under Premier Christy Clark in 2013, on a campaign promise that they would freeze the carbon tax for at least 5 years [4].

Although the province of British Columbia has made progress in addressing climate change their GHG emissions are now on the rise. Without big changes in climate policy, they  will fail to meet our 2020 emission reduction targets. [5]

BC’s  five year experience (2008-2013) with their revenue neutral carbon tax demonstrated that there is no bogeyman when it comes to revenue-neutral carbon taxing. It is a credible mechanism to reduce emissions and can help stimulate and diversify the economy.

 

 


(1)Carbon Tax Act” 2008 Legislative Session: 4th Session, 38th Parliament.
(2)  British Columbia’s Carbon Tax: By the numbers, (2015). Carbon Tax Centre
Last accessed 04-01-2016
(3) Lake, Terry. “Comment: Support for B.C.’s carbon tax continues to grow” Dec 20 2012. Times Colonist. Last accessed” 5-1-13.
(4) Baily, I., 2013. B.C.’s Clark vows to freeze carbon tax for five years, The Globe and Mail, April 3, 2013. http://www.theglobeandmail.com/news/british-columbia/bcs-clark-vows-to-freeze-carbon-tax-for-five-years/article10728482
(5) British Columbia Greenhouse Gas Inventory, Province of British Columbia http://www2.gov.bc.ca/gov/content/environment/climate-change/reports-data/provincial-ghg-inventory-reportbc-s-pir

 

A Case For Hiking the BC CarbonTax

 

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