B.C. Liberals to freeze carbon tax

B.C.'s carbon tax currently adds seven cents to the price of a litre of gas. The B.C. Liberal government is expected to announce that rate will continue for another five years.
— image credit: Black Press files

VICTORIA – Premier Christy Clark and Environment Minister Terry Lake are expected to announce this week that a B.C. Liberal government will freeze B.C.'s carbon tax on fossil fuels at current rates for five years.

Government sources said the freeze is to allow other jurisdictions to catch up to B.C., which taxes carbon dioxide emissions from fossil fuels at $30 a tonne.

Former finance minister Carole Taylor introduced the carbon tax in 2008, covering transportation and heating fuel for homes and businesses. The rate rose over four years and was frozen for this year at seven cents per litre of gasoline, with comparable taxes on diesel, coal, natural gas and other fuels.

The carbon tax is budgeted to raise $1.2 billion in the fiscal year that began April 1, with all revenues required to be returned through personal and business income tax reductions.

B.C.'s carbon tax was a political battleground before the 2009 election, with former NDP leader Carole James campaigning for it to be scrapped. At the 2008 municipal convention in Penticton, when former premier Gordon Campbell announced grants to offset carbon tax costs for towns and cities, James claimed the grants were to placate local politicians who were in open revolt against the tax.

After the 2009 election, the NDP changed its position to support the carbon tax. Leader Adrian Dix has said revenues should go towards transit expansion or energy-saving upgrades in municipal buildings and operations.

B.C. Conservative leader John Cummins promises to eliminate the carbon tax. Cummins emphasizes the disproportionate impact the tax has on colder and more remote parts of B.C., but has not yet specified if offsetting income tax cuts would be reversed to make up the revenue to the province.

B.C. Green Party leader Jane Sterk has restated her 2009 policy of raising the carbon tax from the current $30 per tonne to $50 a tonne immediately. That would bring the tax to more than 10 cents per litre of gasoline.

The Greens would also extend the tax to industrial process emissions such as cement kilns, and cancel the offsetting income tax reductions. The revenues would instead be used to fund transit and possibly energy retrofits for homes and other buildings.

The recent focus has been on another climate program to make the provincial government and its agencies buy carbon offsets through the Pacific Carbon Trust.

Facing criticism about transferring millions of dollars from school and hospital budgets to fund emission reduction projects in private industry, Environment Minister Terry Lake announced in April 2012 that $5 million a year would be set aside from carbon offset payments to fund school district energy efficiency projects.

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