British Columbia carbon tax
The British Columbia carbon tax has been in place since 2008. It is a
British Columbia's policy is unique in North America; only Quebec has a similar retail tax, but it is set at a much lower rate and does not include a matching tax shift.[1] Unlike most other governments, British Columbia's electricity portfolio largely consists of hydroelectric power, and its energy costs, even with the tax, are lower than in most countries.[2][3]
History
Public opinion polls in 2007 showed that the environment had replaced the economy and healthcare as the most important issue to a majority of respondents. The cultural change, which was brought about by greater media and political attention both inside and outside Canada, changed the political dynamic of British Columbia. Traditionally, the left-leaning
In 2016,
Initial implementation
On 19 February 2008,
Unlike previous proposals, the legislation was to keep the pending carbon tax revenue neutral by reducing corporate and income taxes at an equivalent rate.[10] The government also planned to reduce taxes above and beyond the carbon tax offset by $481 million over three years.[5]
The tax was based on the following principles:
- All revenue is recycled through tax reductions – The government was required to demonstrate how all carbon tax revenue was to be returned to taxpayers through tax reductions.[11]
- The tax rate increased gradually – to give individuals and businesses time to make adjustments and respect decisions made prior to the announcement of the tax.[11]
- Protect Low-income individuals and families – A refundable Low Income Climate Action Tax Credit helps offset the tax paid by low-income individuals and families.[11]
- Broad base – Virtually all emissions from fuel combustion are taxed, with no exemptions except those required for integration with other climate actions.[11]
- The tax would not, on its own, meet B.C.'s emission-reduction targets.[11]
Many Canadians concluded that the carbon tax generally benefitted the British Columbian economy, in large part because its revenue neutral feature reduced personal income taxes.[12] However some industries complained loudly that the tax had harmed them, notably cement manufacturers and farmers.[13] Nevertheless, the tax attracted attention in the United States and elsewhere from those seeking an economically efficient way of reducing the emission of greenhouse gases without hurting economic growth.[14]
2010 expansion
In January 2010, the carbon tax was applied to biodiesel. Before the tax actually went into effect, the BC government had sent out "rebate cheques" from expected revenues to all residents of British Columbia as of December 31, 2007.[15] In January 2013, the carbon tax was collecting about $1 billion each year, which was used to lower other taxes in British Columbia. BC Environment Minister Terry Lake said, "It makes sense, it's simple, it's well accepted."[16]
Rates
Here are selected carbon tax rates by fuel:[17]
In April 2019, the carbon tax increased to $40 /
Type of Fuel | Unit | Tax Rate: July 1, 2012 | Tax Rate: 2019[19] | Tax Rate: 2021[18] |
---|---|---|---|---|
Gasoline | ¢/litre | 6.67 | 8.89 | 9.96 |
Diesel (light fuel oil) | ¢/litre | 7.67 | 10.23 | 11.71 |
Jet fuel | ¢/litre | 7.83 | 10.44 | N/A |
Natural gas | ¢/cubic metre | 5.70 | 7.6 | 8.82 |
Propane | ¢/litre | 4.62 | 6.16 | N/A |
Coal - high heat value | $/tonne | 62.31 | 83.08 | N/A |
Coal - low heat value | $/tonne | 53.31 | 71.08 | N/A |
Effects
According to the World Bank, British Columbia's carbon tax policy has been very effective in spurring fuel efficiency gains. Further, the resulting decreases in fuel consumption did not harm economic growth. On the contrary, the province has outperformed the rest of Canada since 2008.[20]
Five-year review
A July 2013 report by Sustainable Prosperity, BC's Carbon Tax Shift After Five Years: An Environmental (and Economic) Success Story, suggested that the policy had been a major success. Since the tax had been in place, fossil fuel consumption had dropped 17.4% per capita and fallen by 18.8% relative to the rest of Canada. Those reductions occurred across all the fuel types covered by the tax, not just vehicle fuel. BC's rate of economic growth (measured as GDP) had kept pace with the rest of Canada's over that time. The tax shift enabled BC to have one of Canada's lowest income tax rates, as of 2012. The aggregate effect of the tax shift was positive of taxpayers as a whole, in that cuts to income and other taxes exceeded carbon tax revenues by $500 million from 2008 to 2012.[21]
The report was released to coincide with an internal review of the policy by the BC government, which ultimately decided to freeze the tax at 2012 levels for five years.
Although fossil fuel consumption initially dropped rapidly, the
Later analyses
The program has seen continued success. From the program’s start in 2007 to 2018, British Columbia’s gasoline consumption increased from 4,629,896 m3 to 5,590,356 m3 (20.7%)
See also
References
- ^ Sustainable Prosperity, p. 5
- ^ "Overview of Electricity Sector - PeoplePowerPlanet". PeoplePowerPlanet. Archived from the original on 2018-03-18. Retrieved 2017-09-07.
- ^ Mines, Ministry of Energy and. "B.C.'s Electricity Rates - Province of British Columbia". www2.gov.bc.ca. Archived from the original on 2017-09-08. Retrieved 2017-09-07.
- Seattle Times. Retrieved 20 July 2018.
- ^ a b c "B.C. introduces carbon tax". CanWest MediaWorks Publications. 22 February 2008. Archived from the original on 10 November 2012. Retrieved 9 January 2013.
- ^ "British Columbia Carbon Tax" (PDF). Ministry of Small Business and Revenue. February 2008. Archived from the original (PDF) on 13 May 2013.
- ^ "B.C.'s Revenue-neutral Carbon Tax". Balanced Budget 2008 Backgrounder. Province of British Columbia. 1 July 2008. Archived from the original on 20 May 2008. Retrieved 5 May 2011.
- ^ "B.C. tax rebate cheques due out this week". CTV British Columbia News. 23 June 2008. Archived from the original on 3 March 2016. Retrieved 9 January 2013.
- ^ Ahearn, Ashley (7 January 2013). "Talk Of A Carbon Tax In The Northwest". EarthFix · Oregon Public Broadcasting. Archived from the original on 16 January 2013. Retrieved 9 January 2013.
"It makes sense, it's simple, it's well accepted," says Terry Lake, the minister of the environment of British Columbia.
- ^ "B.C.'s Revenue-neutral Carbon Tax". Balanced Budget 2008 Backgrounder. Province of British Columbia. 1 July 2008. Retrieved 5 May 2011.
- ^ a b c d e "What is a Carbon Tax?". Government of British Columbia. Archived from the original on 8 April 2010. Retrieved 27 October 2014.
- ^ Beaty, Ross; Lipsey, Richard; Elgie, Stewart (9 July 2014). "The shocking truth about B.C.'s carbon tax: It works". The Globe and Mail. Toronto, Ontario. Archived from the original on 11 December 2015. Retrieved 10 December 2015.
- ^ "British Columbia's carbon tax; The evidence mounts". The Economist. 31 July 2014. Archived from the original on 9 December 2015. Retrieved 10 December 2015.
- ^ Halstead, Ted (16 November 2015). "The Republican Solution for Climate Change; Republicans have the ability to offer a market-based solution to climate change, so why aren't they doing it?". The Atlantic. Washington, D.C. Archived from the original on 25 August 2018. Retrieved 10 December 2015.
- ^ CTV News (23 June 2008). "B.C. tax rebate cheques due out this week". CTV British Columbia News. Retrieved 9 January 2013.
- ^ Ahearn, Ashley (7 January 2013). "Talk Of A Carbon Tax In The Northwest". EarthFix · Oregon Public Broadcasting. Archived from the original on 2013-01-16. Retrieved 9 January 2013.
"It makes sense, it's simple, it's well accepted," says Terry Lake, the minister of the environment of British Columbia.
- ^ "British Columbia's Carbon Tax". Province of British Columbia. Retrieved 14 July 2018.
- ^ a b Strategy, Ministry of Environment and Climate Change. "British Columbia's Carbon Tax - Province of British Columbia". www2.gov.bc.ca. Retrieved 2021-07-06.
- ^ "Ministry of Finance Tax Bulletin Revised April 2019" (PDF). Retrieved April 25, 2019.
- ^ Elgie, Stewart; Beaty, Ross; Lipsey, Richard. "British Columbia's carbon tax shift: An environmental and economic success". worldbank.org. The World Bank. Retrieved 1 September 2016.
- ^ "BC's Carbon Tax Shift After Five Years".
- ^ "Province of British Columbia".
- ^ Finlayson, Jock. "B.C.'s carbon tax hurting businesses".
- ^ Donnelly, Aldyen. "Fantasy carbon-tax modelling overcomes arithmetic".
- ^ "BC's carbon tax after 5 years - Talking Sustainability - Simon Fraser University". Archived from the original on 2017-02-23. Retrieved 2017-08-25.
- ^ https://nicholasinstitute.duke.edu/sites/default/files/publications/ni_wp_15-04_full.pdf pg 8
- ^ "Add/Remove data - Sales of fuel used for road motor vehicles, annual". 28 September 2020.
- ^ "Supply and disposition of refined petroleum products, monthly". 4 September 2020.
- ^ "Sales of fuel used for road motor vehicles, annual". 28 September 2020.
- . Retrieved 2024-03-26.
- ^ Wooldridge, Jeffrey M (2010). Econometric analysis of cross section and panel data. MIT press.
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- ^ . Retrieved 2024-03-26.
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