Canadian Province Plans Comprehensive Carbon Tax
Date: 21-Feb-08
Country: CANADA
Author: Allan Dowd
British Columbia said the tax on fossil fuels used by businesses and individuals will raise C$1.85 billion ($1.82 billion) over the next three years, but officials were quick to describe the plan as "revenue neutral" because it will be offset by tax cuts and a one-time C$100 payment to each provincial resident this year.
Last year, Quebec became the first Canadian province to enact a limited carbon tax, but British Columbia said its plan will be among the world's most comprehensive, and was needed to meet the B.C. Liberal government's promise to cut emissions of greenhouse gases linked to global warming by 33 percent by 2020.
The province's plan also delivered a slap to the federal Conservative government, which is cool to the idea of a nationwide carbon tax and complained it does not want the provinces going it alone.
"It is our decision as a province that we must start now to take action on climate change and we can't wait until we get a consensus," Finance Minister Carole Taylor told reporters, saying it could be "a turning point" for Canada.
The tax, which will be implemented this year if passed by the legislature, was introduced as part of the government's C$37.7 billion budget for the 2008-2009 fiscal year.
Environmentalists say carbon taxes provide an economic incentive to reduce pollution, because people and companies can save money as their emissions drop.
AN ECONOMIC DRAIN?
But critics worry it will be a drain on the economy when British Columbia's largest industry -- forestry -- is struggling with the implosion of the US housing market.
"Really, this may be the best time to do it because we have to make it work when things are a little tight," said Taylor, who made it point to wear a green dress and green shoes for the news conference.
The tax will apply to nearly all fossil fuels, including gasoline and home heating fuel, starting at C$10 per tonne of carbon emissions in 2008 and increased by C$5 a tonne annually for the next five years.
British Columbia is also working with a coalition of US states and Canadian provinces to develop a regional carbon credit trading system that will impose caps on total emissions from industrial polluters.
Taylor said the province will ensure industries will not be double-penalized by a carbon tax and emission caps, although officials said details on how the plans will interact had yet to be decided.
Environmentalists were quick to praise the announcement, but others were worried about the impact of the tax on low income households, and industries that are already struggling with high energy prices.
"The government showed some real leadership here," said Ian Bruce of the David Suzuki Foundation, a leading Canadian environmental group.
Jim Sinclair, head of the B.C. Federation of Labour said the government appeared more worried about the impact on businesses than on workers who might lose their jobs if plants are shut down.
(US$1=$1.02 Canadian)
(Reporting by Allan Dowd; Editing by Rob Wilson)