BC Carbon Tax: All-party Committee Calls For Cap On Increases

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BC CARBON TAX
Environment Minister Terry Lake says the Liberal government is reviewing the future of its groundbreaking bc carbon tax, including ideas to cap increases and fund green initiatives. | Getty Images

VICTORIA - Environment Minister Terry Lake says the Liberal government is reviewing the future of its groundbreaking carbon tax, including ideas to cap increases and fund green initiatives.

Lake's comments came Tuesday following the release of the government's all-party finance committee report, which recommends capping the carbon tax next year — a recommendation among several rejected by the minority New Democrat members of the committee.

British Columbia earned kudos from the international environmental movement when it announced plans more than four years ago to introduce a carbon tax on fossil fuels as part of its aggressive plan to cut greenhouse gas emissions by one-third by 2020.

The province became the first and only jurisdiction in North America to implement an escalating carbon tax, starting in 2008 with a tax that amounted to about 3.4 cents per litre on fossil fuels, including gasoline. Legislated increases amounted to about seven cents per litre by July 2012.

"We've been discussing as a government, and it's been quite open and public, about whether or not to increase it (the carbon tax) past that point," said Lake.

"What would that be used for? Would we continue to make it revenue neutral or would we take any incremental increases and put it toward green initiatives, whether it's transit in urban areas or other green initiatives throughout rural B.C?"

The 10-member — six Liberal, four New Democrat — finance committee recommended capping the carbon tax at the July 2012 level and halting spending on cap-and-trade initiatives until the province has more like-minded trading partners.

The finance committee made 75 recommendations after 15 public hearings across the province. The report is used by the Ministry of Finance to develop the 2012-13 budget.

New Democrat Doug Donaldson, the deputy chairman of the finance committee, said the entire committee supported 80 per cent of the recommendations, but those surrounding the carbon tax were rejected by the Opposition, creating divisions along party lines within the committee.

"We saw this as an effort by the Liberals on the committee to do an end run around the carbon tax and yet not really bringing it out into the open and into the legislature to really discuss where they were headed on the carbon tax," said Donaldson.

The committee received submissions from business groups to review or cap the carbon tax and calls from environmental groups to raise the tax.

Lake said British Columbia was an environmental leader when it introduced the carbon tax, but other jurisdictions are catching up.

He said Alberta now has a price on carbon, and Australia is about to introduce its own carbon tax.

Last month's throne speech suggested the Liberal government was prepared to pursue environmental initiatives beyond the carbon tax after the last legislated increase occurs in July 2012, but there was no mention of reviewing the future of the carbon tax.

Two Liberal cabinet ministers, George Abbott and Kevin Falcon, made changing the carbon tax part of their platforms during last February's Liberal leadership contest won by Premier Christy Clark.

Abbott said he would consider a referendum question that asks British Columbians if they support putting a three-year hold on further carbon tax hikes.

Falcon said he would consider freezing the carbon tax after 2012.

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