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B.C. to ‘stick’ with April 1 carbon tax increase: Environment Minister

Economists across Canada support the tax, but public support is waning
British Columbia’s environment minister George Heyman defends the April 1 increase in the carbon tax. Some 200 economists also recently penned a letter in support of carbon taxation. But opposition to the tax is growing and less than half of current tax households receive the full climate action tax credit with increases planned for the future. (Black Press Media file photo) THE CANADIAN PRESS/Darryl Dyck

B.C. is “sticking” with its planned provincial carbon tax poised to add 3.3 cents to each litre of gasoline starting April 1.

Environment Minister George Heyman confirmed the increase of 23 per cent Thursday, meaning the carbon tax will rise by $15 to $80 per tonne.

“The first carbon tax in Canada was in British Columbia and it has been effective in reducing emissions,” Heyman said, adding 100 per cent of the increase will be funneled back to low and middle-income British Columbians through the climate action tax credit. “That’s an important commitment and at the same time, we have many, many other measures that we are investing in that are reducing costs for British Columbians.”

Heyman also pushed back against the argument that the tax is feeding inflation.

“In the last month alone, we have seen the price of gasoline in Vancouver go up by 30 cents a litre,” he said. “I have not heard a single word from (B.C. United Leader) Kevin Falcon or (Conservative Party of B.C. Leader) John Rustad about that.”

B.C. United has called for cancellation of the hike and the elimination of the provincial fuel tax in the face of inflation. The Conservative Party of B.C. has echoed calls from the federal Conservative Party of Canada to eliminate the tax completely, also citing inflation. B.C. United has also promised to cut the tax if the federal Tories were to win the next federal election and eliminate the federal carbon tax. He expressed fears that would put B.C. at a competitive disadvantage.

An open letter signed by some 200 Canadian economists questions the argument that carbon taxation is a “major cause” of inflation. Global factors such COVID-19 and international conflicts have “mainly” contributed to inflation, not carbon taxes, it states.

“According to the Bank of Canada, carbon pricing has caused less than 1/20th of Canada’s inflation in the past two years. “Climate change, on the other hand, poses a real threat to Canadians’ economic well-being. For example, it increases the risk and severity of natural disturbances, such as fires, floods, and severe storms.”

Ken Peacock, chief economist and senior vice-president at the Business Council of British Columbia, is among the more critical voices of the tax.

“The higher rate of inflation is not due entirely to the carbon tax, that is absolutely the case,” he said. “But at the same time to say, an increase in the carbon tax will not contribute further to inflation is a silly thing to say.”

British Columbians can expect what Peacock calls “sticker-shocks” at the pumps on April 1 and the increase will work its way through the system.

“Everything that gets consumed gets delivered by truck,” he said.

Peacock also predicts that rising living costs will prompt people to start asking “some serious questions” about carbon taxation itself.

“The general framework is very much under pressure at the federal level and I think that is going to continue to spill over provincially,” he said.

RELATED: Conservatives send White Rock Whip to Penticton to protest carbon tax

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

The letter-writing economists, however, warn against abandoning carbon pricing. It not only reduces emissions, it is also the least expensive and most flexible way of reducing emissions, they write.

“(When) something costs more (in this case fossil fuels), people use less of it,” they write. “That is basic economics and common sense.

“In a world of scarce resources, it seems imprudent to abandon carbon pricing, only to replace it with more costly methods of reducing emissions—or, worse still, take no measures to reduce emissions.”

Support for the tx appears to be waning, based on growing support for politicians who want to get rid of it.

A recent Mainstreet Research found 54 per cent of surveyed British Columbians favoured federal Tory Leader Pierre Poilievre in his dispute with B.C. Premier David Eby (34 per cent) over Eby’s refusal to join seven other premiers calling for no increase. Eby said such a move would leave British Columbians with less money through the provincial rebate program.

But analysts have argued that the rebate program does not reach all British Columbians.

Singles qualify for the full rebate if they earn less than $39,115 in after-tax income and families if they earn less than $50,170. The rebate drops by two per cent of the income above the threshold until the credit becomes zero. Singles earning above $61,465 in after-tax income and households earning more $83,695 receive zero.

While these thresholds will rise on July 1, 43 per of the three million eligible “tax households”, will receive the full amount in 2024-2025, just as it was the case in 2023-24. Overall, 65 per cent of all tax households will receive full or partial rebates, with 1.3 million receiving full rebates.

Government is planning extend the rebate to 80 per cent of households by 2030 when the carbon tax is supposed to hit $170 per tonne.

RELATED: Eby mocks Poilievre letter asking B.C. to join carbon price fight

Wolf Depner

About the Author: Wolf Depner

I joined the national team with Black Press Media in 2023 from the Peninsula News Review, where I had reported on Vancouver Island's Saanich Peninsula since 2019.
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