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Nova Scotia Should Become the Second Province to Adopt a Carbon Tax

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Dear Friends,

I don't want to brag or anything, but I paid my carbon tax yesterday.

I'd just tanked up my vehicle -- I don't yet have an electric car -- with 30-odd litres of regular unleaded, near my home here in Vancouver, B.C.

The tab included an extra $0.60, a modest premium that you, my pals in Atlantic Canada, aren't currently paying. But I was pleased to cough it up, because I know that the law requiring me to do so is not only reducing my province's dependence on fossil fuels, it's also creating jobs and strengthening our economy.

I'm not the only one who knows it, either. Seven years ago, provincial leaders out on this coast introduced the carbon tax, which today tacks an extra six cents onto the price of a litre of gas and similar amounts on natural gas and propane. Nobody paid much attention back then, but in the intervening years, it's become a bit of a public policy rock star.

This past December, the World Bank lauded British Columbia's carbon tax as "the most powerful example" of effective climate policies. A year earlier, the secretary general of the Organization for Economic Cooperation and Development (OECD) called it "as close to a textbook example as we have" of climate policy done right. The United Kingdom's Green Fiscal Commission also gave it a high-five, as did The Economist.

In the words of that respected business magazine, British Columbia's carbon tax has proven itself "a winner" that cuts pollution without hurting the economy.

We know this because economists at the Sustainable Prosperity think tank, and other academics, have pored over Statistics Canada data. They've concluded that, in the years since the policy came into force, carbon pollution and per-capita fuel consumption have both dropped in British Columbia. Meanwhile, the province's economy is outperforming the Canadian average.

Let me say that again: Carbon pollution is down, and business is up. In other words, our carbon tax works exactly as designed.

Our carbon tax has helped to grow our clean-tech sector which creates thousands of clean,
high-paying jobs. In fact our recent report Tracking the Energy Revolution shows that in 2013, direct jobs in the various sectors that together comprise Canada's clean energy sector outpaced direct jobs in the oil sands. And of course that was before the plunging price of oil started impacting the oil sands. B.C.'s carbon tax has put us at the front lines of this trend. Our carbon tax is also used to lower personal and corporate taxes.

As I've seen in my province, a carbon tax is as a useful fiscal tool that can be tailored to meet both the environmental and economic goals of any given jurisdiction.

There is a lot to like about our carbon tax, too. For example, the province added protection for low-income citizens, to help out those who are going through difficult economic times, and provided northern and rural homeowners with up to a $200 annual benefit.

Last last year, Nova Scotia's Tax and Regulatory Review endorsed the idea of a carbon tax. At about the same time, my team was conducting a series of candid interviews with the men and women who designed and introduced British Columbia's version--and also expert observers who have followed its progress over the years.

As we note in the report that came out of those conversations, How To Adopt a Winning Carbon Price, one the questions we asked was, "what would be your advice to other jurisdictions considering a carbon price?"

"Do it!" said one former leader, "It's the right thing to do. It should be the future of taxation." "Get smart," added another. "It's a winner. Make it a winner."

It's good advice to keep in mind. How great would it be if Nova Scotia were to join hands with British Columbia as the second province to enact a carbon tax, and serve as climate leadership "bookends," inspiring all the others in between to follow suit.

Now that would be something to brag about.

All best,

Merran Smith

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