While reading of this year’s budget, BC’s Finance Minister Carole Taylor was decked out in green.
It was more than a fashion statement.
Included in the provincial budget was a revenue-neutral carbon tax, which the government says will help cut emissions.
Starting July 1, carbon-based fuels, such as gasoline, diesel, natural gas and home heating oil, will be taxed at $10 for each ton of greenhouse gas generated.
Initially, this will translate to an extra 2.4 cents a litre on gasoline at the pump and 2.8 cents a litre for home heating fuel.
The carbon tax rate will rise by $5 a year for the next four years so that by 2012 the tax will have climbed to $30 per tonne of greenhouse gases generated.
“The keystone of this policy is that it will bring in about $1.8 billion in the next three years but none of it comes into government,” Taylor said Friday.
“All of it gets returned to the people and businesses of British Columbia with tax cuts.”
Personal income tax will be cut by five per cent and business income taxes will now be among the lowest in Canada, she said.
“What we’re trying to say is, here’s your money, you make the choices,” said Taylor.
“You can decide to continue the same patterns you always have and these dollars will cover that increase in carbon tax.
“But if you decide to make changes you’ll be left with extra dollars in your pocket to use for other things.”
The tax has earned BC’s Liberal government praise from environmental groups.
On Monday, David Suzuki released a report arguing the benefits of a similar carbon tax nationwide.
The National Roundtable on Environment and Economy recommended a federal carbon tax last January.
However, Stephen Harper’s Conservative government has rejected the idea.
“Everyone talks about a carbon tax, but we believe that we’re the first to actually implement it,” said Taylor.
“But we also, in reading the literature, believe that this is where everyone is headed.”
Opposition parties have claimed the tax will hurt low-income earners and that it’s not tough enough on industrial polluters.
“The opposition is actually wrong on both those things,” said Taylor.
“The leader of the Opposition said that there is an exemption for the big industries, and that’s just not true.
“In the same way as I or you or any business, they’ll have to pay the carbon tax on the fuel that they use.”
The budget also introduced a new tax credit for low-income earners.
A low-income family with two children will receive $260 on top of the five per cent income tax cut.
“We believe that this will more than compensate for the extra carbon tax cost,” said Taylor.
“The average carbon tax cost is estimated to be under $100 for a family, so they’ll have some extra dollars to help them make some choices that are better for the environment.”
However the carbon tax may not be enough to reach British Columbia’s ambitious goals for the environment.
In this year’s throne speech, Premier Gordon Campbell announced his government would attempt to reduce carbon emissions by one third by 2022.
That’s equivalent to nearly 40 million tonnes of greenhouse gases.
The government predicts that the carbon tax will only decrease emissions by three million tonnes.
British Columbia should be able to reach its goals with the help of other environmental programs, said Taylor.
“The cap-and-trade program with the big emitters will make a bigger difference,” she said.
“But that’s still being developed and will be brought in probably August or September.”