197
VICTORIA — The B.C. government introduced North America's first full-fledged carbon tax yesterday, an attempt to engineer a social movement aimed at getting British Columbians to cut their greenhouse-gas emissions.
The new tax will be tempered with matching income-tax cuts plus what is likely the province's largest-ever dividend to taxpayers.
"We promised you green and today we delivered green," said Finance Minister Carole Taylor, who presented the changes as a way of encouraging environmentally friendly choices through a carrot-and-stick system. "If you start to change your lifestyle even modestly ... you will have extra dollars in your pocket," she said.
The $37.7-billion budget boosts program spending, increases the debt and forecasts the slowest economic growth for the province since 2001. The economy and debt were not top of mind for Ms. Taylor, who stuck to a green theme in everything from the budget cover to her outfit.
B.C. Finance Minister Carole Taylor, standing, is applauded by government members as she delivers her final budget in the legislature in Victoria. Front row from left is Minister of Economic Development Colin Hansen, Minister of Education and Deputy Premier Shirley Bond, Carole Taylor and Premier Gordon Campbell. (Chuck Stoody/CP)
Related Articles
"This is an important turning point for British Columbia - and we think for Canada - because we are out in front on this," she said.
The first change British Columbians will see is a feel-good "climate-change dividend" worth $100 a person, expected to arrive in the mail by June.
The dividend won't purchase much in the way of energy-saving changes - it could buy two months worth of bus passes or a programmable thermostat - but it is designed to soften the impact of the new energy tax that takes effect July 1.
The tax on virtually all fossil fuels, including gasoline, diesel and home heating fuel, will rise and continue to climb over the next five years. The price of gas is expected to increase this year by 2.4 cents a litre.
The carbon tax promises to be revenue neutral, but does not account for increased costs in other areas, such as the planned hike in B.C. Hydro rates. Critics noted that if Hydro's rate application is approved, the average household will pay about $200 a year in extra energy costs.
The opposition New Democratic Party said the budget does too much for business at the expense of working families.
"It's a great day for banks and big polluters. Banks got a huge tax break and polluters don't have to pay the carbon tax," NDP finance critic Bruce Ralston said. The budget states that industrial emissions from the production of oil, gas, cement and other sectors will not be subject to the tax initially.
"But it asks consumers to spend money they don't have to fight climate change," Mr. Ralston said.
The dividend will likely be a distant memory by the time British Columbians go to the polls in May, 2009, but Jim Sinclair, head of the B.C. Federation of Labour, still labelled it an election stunt.
"I imagine the company guys here today are going to be quite happy, but to the average British Columbian, that 100 bucks is a cheap election trick and it won't go far."
In fact, business leaders arrived at the budget briefing in Victoria braced for a fight over this budget, after weeks of speculation that the green agenda might harm the fragile B.C. economy. But most left with either praise or at least muted criticism.
"We were prepared to be aggressively negative," said John Winter of the B.C. Chamber of Commerce. He said Ms. Taylor didn't completely satisfy the concerns of business, "but she presented her case well."
Ms. Taylor's budget puts a price on greenhouse-gas emissions that is low by global market standards - just $10 per tonne to start - but it is the first jurisdiction in Canada to do so. The price will rise to $30 a tonne in five years.
It is designed to discourage use of fossil fuels to the point where it reduces a total of three million tonnes of greenhouse gases in B.C. over the next five years. That is a small fraction of the 40 million tonnes the province is supposed to eliminate by 2020.
For the first time the government put a price on the economic impact of its global-warming agenda, which this year adds up to $167-million in lost economic growth.
However, Ms. Taylor said the tax cuts are the answer to the concerns of business, because they will help B.C.'s competitive climate with some of the lowest tax rates in the country.
The budget, which contains a large section printed on green-tinted paper, offers an unusual feature: a section outlining how individuals can save money by going green. It puts a price tag on weatherizing windows, walking to work and replacing an old furnace.
Environmentalists hailed the budget as a landmark in the battle against global warming.
"A carbon tax makes polluting more expensive and being green more affordable," said Ian Bruce, climate-change specialist for the David Suzuki Foundation.
But the Canadian Taxpayers Federation said Ms. Taylor ignored her own prebudget consultation report that did not find broad support for a carbon tax.
