In 2008, our government took the bold step of introducing Canada’s first revenue-neutral carbon tax. While it was controversial at the time, a recent Environics Institute survey shows that B.C.’s leadership on climate action is being recognized and supported by British Columbians, as well as other Canadians.
The survey found that 64 per cent of British Columbians support the carbon tax as a way to fight climate change, which is the highest level of support recorded by the institute since the carbon tax was first announced in February 2008. In addition, the institute found that the proportion of people strongly opposed to the carbon tax has dropped to only 17 per cent.
It’s also heartening to know that, according to the survey, 59 per cent of Canadians in the rest of the country would support a B.C.-style carbon tax in their own province. And support for the carbon tax goes beyond Canada’s borders, with it being highlighted as a model for broader adoption in the Economist, the New York Times and the Los Angeles Times.
British Columbia’s revenue-neutral carbon tax is innovative in taxing emissions (something we don’t want) rather than taxing income (something we do want) and promotes more environmentally responsible choices.
Every dollar it generates is returned to British Columbians through reductions in other taxes. Over the life of the tax, $500 million more has been returned than has been raised in revenue. The carbon tax is returned in other tax reductions, including credits for low-income individuals, cutting the first two personal income-tax rates by five per cent, providing northern and rural homeowners with a property-tax benefit of up to $200 annually, and reducing business taxes.
The carbon tax is the cornerstone of British Columbia’s efforts to progress toward its ambitious greenhouse-gas target of a 33 per cent reduction from 2007 levels by 2020. Putting a price on carbon emissions is an effective way to reduce greenhouse-gas emissions because it rewards green choices, encourages consumers to reduce their fuel consumption, increases fuel efficiency, encourages the use of cleaner fuels and encourages the adoption of new technology. The carbon tax puts a price on each tonne of greenhouse gas emitted, while returning every dollar collected back to taxpayers.
While taxpayers have benefited from a lower tax burden, it appears that the carbon tax has not harmed B.C.’s economy, while having a positive effect on the environment. For instance, in June 2012, B.C. released a legislatively required report on progress toward its greenhouse-gas reduction targets. The report, titled Making Progress on B.C.’s Climate Action Plan, notes that between 2007 (when B.C.’s Climate Action Plan was implemented) and 2010, B.C.’s greenhouse-gas emissions decreased 4.5 per cent while our population grew. At the same time, B.C.’s GDP growth was higher than the Canadian average.
In addition, Sustainable Prosperity, a University of Ottawa research network, issued a report in June 2012 stating that B.C. sales of fuels subject to the tax have dropped 15.1 per cent per capita since 2008 while per-capita sales in the rest of Canada have increased by 1.3 per cent. The report concludes that B.C.’s carbon tax “seems to have had a positive environmental impact without harming the economy.”
Even when there is support for government policies, they need to be reviewed periodically to ensure they represent the best interests of the public. In Budget 2012, our government announced a comprehensive review of the carbon tax and its impact on British Columbians. The review covers all aspects of the carbon tax, including revenue neutrality and considers the impact on the competitiveness of B.C. businesses. The Ministry of Finance is leading this review and is considering the findings as part of the Budget 2013 process.
Regardless of the outcome of the carbon-tax review, Premier Christy Clark has been clear that B.C. will remain a climate action leader. The B.C. Jobs Plan and the Green Economy Report reiterate this leadership position, reaffirming that our climate action policies are a driver of innovation and economic outcomes, and will remain so well into the future with the support of the majority of British Columbians.
Terry Lake is B.C.’s minister of environment.
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