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Carbon tax talk heating up in B.C. as April 1 hike nears

Taxpayers group and federal Conservative leader urging premier to oppose increase
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Carson Binda, the B.C. director of the Canadian Taxpayers Federation, stood outside Premier David Eby’s constituency office in Vancouver on March 21, 2024, demanding that he oppose the upcoming carbon tax hike. (Jane Skrypnek/Black Press Media)

The B.C. director of the Canadian Taxpayers Federation was outside Premier David Eby’s Vancouver constituency office on Thursday morning (March 21), urging him to cancel the upcoming carbon tax hike.

Seven of Canada’s 10 premiers have spoken out against the tax in recent weeks, which is set to rise on April 1 from $65 to $80 per tonne of carbon dioxide equivalent emitted.

The tax is mandated by the federal government and can’t be cancelled by any of the premiers, but that fact hasn’t stopped them from putting pressure on Ottawa to stop the hike. Political opponents have also been leveraging the issue ahead of the next federal election.

On Thursday, Conservative Party leader Pierre Poilievre attempted to pass a non-confidence motion against Prime Minister Justin Trudeau over the tax. It was voted down.

Carson Binda, the B.C. director of the Canadian Taxpayers Federation, said Eby needs to join other provincial leaders in pushing for an end to the tax. He said the levy is the last thing British Columbians need as they continue to struggle with the cost of living.

The two areas residents are most likely to see a difference is at the gas pump and on their home heating bills.

On regular gas, the tax will rise from 14.31 to 17.61 cents per litre. For a 40-litre tank, this will amount to about $7 in taxes to fill up, an additional $1.30 over what it costs now. Binda argued the price is actually quite a bit higher if you add up all fuel-related taxes, such as excise and transit.

This jump at the pump may also impact British Columbians indirectly, by upping the cost of transporting things like food into grocery stores.

Still, both B.C. and the federal government say much of the cost incurred by carbon taxes is actually returned to people through rebates.

The point, University of British Columbia political science professor Kathryn Harrison said, is to financially incentivize people to reduce their emissions. Regardless of how much they consume, people get the same rebates back. So, if someone reduced their gas use and spent less on the tax, they would end up with more money in their pocket at the end of the year than someone who didn’t change their habits.

Canada’s parliamentary budget officer found in a March 2023 report that 80 per cent of Canadians are receiving more back in rebates than they pay in taxes. The situation is a little different in B.C., which has its own carbon tax system based off of household income. It is built to benefit lower income people and families the most.

Here, the province says more than two million British Columbians will be receiving a credit by July, with 1.3 million of them receiving the maximum amount. The credit is also set to increase and B.C. estimates the majority of residents will come out ahead on carbon taxes by 2030.

However, Parliamentary Budget Officer Yves Giroux also noted in his report that when the carbon tax’s overall impact on the economy is taken into account, it could result in less money for the majority of Canadians, regardless of rebates. The same analysis has not been done for B.C.

Giroux’s report did not include the projected costs of climate change, which the carbon tax aims to offset. Binda said the Canadian Taxpayers Federation also hasn’t done any projections of what climate change will cost taxpayers in the future.

Many other researchers have, though. In 2022, global engineering and architecture services firm, GHD, released a report estimating that floods, droughts and storms could cost the Canadian economy $139 billion by 2050. Other reports have similarly projected costs in the billions.

READ ALSO: Floods, drought, storms could cost Canada’s economy $139 billion by 2050: report

Whether a carbon tax is the most effective way to mitigate those future costs is up for debate.

A 2015 study done on B.C.’s levy, which has been in place since 2008, found the tax reduced emissions by between five and 15 per cent without negatively impacting economic growth.

A more recent 2022 study, however, determined that while the tax has reduced transportation emissions, it is too soon to say whether it’s had a statistically significant reduction on emissions overall. That author, University of Victoria economics professor Felix Pretis, said the tax would have to be far higher and combined with other measures to have a real impact.

The Canadian Climate Institute released a more optimistic analysis on Thursday. The research group says the tax could cut greenhouse-gas emissions by more than 100 million tonnes a year by 2030, although only a fifth of that is expected to come from the consumer side of things.

READ ALSO: Industrial carbon price cuts 3 times the emissions of consumer levy: report

Harrison noted that while a carbon tax may not be perfect, no one calling for its demise has suggested a better way to meet emission reduction goals.

She said she recognizes that a larger tax is a real concern for people right now, but added that it is a very small fraction of the price increases occurring.

Beyond the Canadian Taxpayers Federation, Conservative Party leader Pierre Poilievre has also called on B.C. to oppose the April 1 hike. He wrote a letter to Eby on Monday (March 18), claiming that British Columbians can’t even afford to buy baloney after eight years under the NDP.

Eby rejected Poilievre’s accusation and said British Columbians would end up with less money if he cut the carbon tax and accompanying rebates, as suggested by the Conservative leader’s “campaign office and baloney factory.”

Editor’s Note: This story has been updated with information on the number of British Columbians receiving the Climate Action Tax Credit and to clarify that B.C.’s system is based off of household income.





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