2013: Will BC voters reject a Carbon Tax?

British Columbia is known for its progressive legislation on environmental issues.  The publication “Corporate Knights”, which advertizes itself as The Magazine for Clean Capitalism, ranks British Columbia second in its assessment of “Canada’s Greenest Province”.   (The leader among Canadian provinces:  Ontario.)

One law that has attracted favourable commentary from abroad is the BC carbon tax, which was implemented on July 1, 2008.   The carbon tax is revenue neutral, meaning every dollar generated by the tax is returned to British Columbians through reductions in other taxes. Tax cut measures include income tax credits for low income individuals, cutting the first two personal income tax rates by 5 per cent, providing northern and rural homeowners a benefit of up to $200 annually, and reducing the business taxes.

In Canada the year 2008 was the high water mark for governmental concern over GHG Emissions.  The turning point was the financial crisis in the fall of 2008, and the world recession that followed.  In the fall election that year Canadian voters rejected a proposal for a carbon tax, and supported a party that was seen to be strong on economic and business matters.Since then few Governments have made the reduction of these emissions a priority, and some –here we are thinking of the Federal Government – have done next to nothing to achieve these reductions.

Opposition parties in both BC and Ontario have campaigned against the cost of measures undertaken by these provinces to reduce GHG emissions.  In Ontario the opposition is against the Government’s intention to phase our coal-fired generation plants.  In BC the NDP opposition threatens to repeal the carbon tax.  This step would please the many special interest groups who complain that the tax is hurting their competitiveness.

The BC Government looks shaky.  A number of high profile cabinet ministers, including the Minister of Finance, will not be running for office in the next election.   The challenge for the BC Government is to convince voters that the environment must be the central issue in the next election.  Otherwise a defeat at the polls and the repeal of legislation that is a world model seems likely.

ForourGrandchildren has recognized  the political difficulty facing a government that has to “sell” a carbon tax. In the words of Lord Lawson of Braby:

“No the real reason why governments shy away from the tax is that , while transparency is desirable in economic terms, for political reasons it is the last thing they wish to see.  Obfuscation is far more attractive, not to mention the creation of a business community with a vested interested in the trading system, even if it is largely a scam, which can be counted on to support government policy on that account.  Moreover’ tax’ is an honorary four-letter word. Even the entire yield of a carbon tax could (and indeed should) be used to reduce other taxes, governments fear that a carbon tax, with its effect on air fares and mounting costs, might prove unpopular.  And the last thing they wish to have to reveal is the true cost of cutting back on CO2 emissions.”  (emphasis added)

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1 thought on “2013: Will BC voters reject a Carbon Tax?”

  1. The carbon tax is sold as revenue neutral.It’s not.Even if the carbon tax worked to reduce GHG the other taxes in fuel would also drop.A 30% drop in gasoline use would result in $500 million less revenue per year.

    The carbon tax is condesending socialist policy that has not and will not have any meaningfull effect.

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