B.C. is 鈥渟ticking鈥� with its planned provincial carbon tax poised to add 3.3 cents to each litre of gasoline starting April 1.
Environment Minister George Heyman confirmed the increase of 23 per cent Thursday, meaning the carbon tax will rise by $15 to $80 per tonne.
鈥淭he first carbon tax in Canada was in British Columbia and it has been effective in reducing emissions,鈥� Heyman said, adding 100 per cent of the increase will be funneled back to low and middle-income British Columbians through the climate action tax credit. 鈥淭hat鈥檚 an important commitment and at the same time, we have many, many other measures that we are investing in that are reducing costs for British Columbians.鈥�
Heyman also pushed back against the argument that the tax is feeding inflation.
鈥淚n the last month alone, we have seen the price of gasoline in Vancouver go up by 30 cents a litre,鈥� he said. 鈥淚 have not heard a single word from (B.C. United Leader) Kevin Falcon or (Conservative Party of B.C. Leader) John Rustad about that.鈥�
B.C. United has called for cancellation of the hike and the elimination of the provincial fuel tax in the face of inflation. The Conservative Party of B.C. has echoed calls from the federal Conservative Party of Canada to eliminate the tax completely, also citing inflation. B.C. United has also promised to cut the tax if the federal Tories were to win the next federal election and eliminate the federal carbon tax. He expressed fears that would put B.C. at a competitive disadvantage.
An open letter signed by some 200 Canadian economists questions the argument that carbon taxation is a 鈥渕ajor cause鈥� of inflation. Global factors such COVID-19 and international conflicts have 鈥渕ainly鈥� contributed to inflation, not carbon taxes, it states.
鈥淎ccording to the Bank of Canada, carbon pricing has caused less than 1/20th of Canada鈥檚 inflation in the past two years. 鈥淐limate change, on the other hand, poses a real threat to Canadians鈥� economic well-being. For example, it increases the risk and severity of natural disturbances, such as fires, floods, and severe storms.鈥�
Ken Peacock, chief economist and senior vice-president at the Business Council of British Columbia, is among the more critical voices of the tax.
鈥淭he higher rate of inflation is not due entirely to the carbon tax, that is absolutely the case,鈥� he said. 鈥淏ut at the same time to say, an increase in the carbon tax will not contribute further to inflation is a silly thing to say.鈥�
British Columbians can expect what Peacock calls 鈥渟ticker-shocks鈥� at the pumps on April 1 and the increase will work its way through the system.
鈥淓verything that gets consumed gets delivered by truck,鈥� he said.
Peacock also predicts that rising living costs will prompt people to start asking 鈥渟ome serious questions鈥� about carbon taxation itself.
鈥淭he general framework is very much under pressure at the federal level and I think that is going to continue to spill over provincially,鈥� he said.
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The letter-writing economists, however, warn against abandoning carbon pricing. It not only reduces emissions, it is also the least expensive and most flexible way of reducing emissions, they write.
鈥�(When) something costs more (in this case fossil fuels), people use less of it,鈥� they write. 鈥淭hat is basic economics and common sense.
鈥淚n a world of scarce resources, it seems imprudent to abandon carbon pricing, only to replace it with more costly methods of reducing emissions鈥攐r, worse still, take no measures to reduce emissions.鈥�
Support for the tx appears to be waning, based on growing support for politicians who want to get rid of it.
A recent Mainstreet Research found 54 per cent of surveyed British Columbians favoured federal Tory Leader Pierre Poilievre in his dispute with B.C. Premier David Eby (34 per cent) over Eby鈥檚 refusal to join seven other premiers calling for no increase. Eby said such a move would leave British Columbians with less money through the provincial rebate program.
But analysts have argued that the rebate program does not reach all British Columbians.
Singles qualify for the full rebate if they earn less than $39,115 in after-tax income and families if they earn less than $50,170. The rebate drops by two per cent of the income above the threshold until the credit becomes zero. Singles earning above $61,465 in after-tax income and households earning more $83,695 receive zero.
While these thresholds will rise on July 1, 43 per of the three million eligible 鈥渢ax households鈥�, will receive the full amount in 2024-2025, just as it was the case in 2023-24. Overall, 65 per cent of all tax households will receive full or partial rebates, with 1.3 million receiving full rebates.
Government is planning extend the rebate to 80 per cent of households by 2030 when the carbon tax is supposed to hit $170 per tonne.
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