Liberals need to axe the carbon tax
One of the strangest things Premier Christy Clark has done during her brief flirtation with power is doggedly defend her predecessor’s imposition of a punitive carbon tax on consumers.
Debate about the future of the tax, which we know as the 6.7-cents-a-litre gas tax, is intense around Clark’s cabinet table. In fact, two of her ministers who are charged with defending the carbon tax are starting to fudge on the issue.
Former premier and carbon footprint tap dancer Gordon Campbell ushered in the carbon tax in 2008. It was part of his grand scheme to cut greenhouse gas emissions by more than 33 per cent by 2020. It was one of Campbell’s loneliest moments on the North American stage. Not one single jurisdiction on the continent followed suit.
At the time, the Liberals said: “The purpose of the tax is to send a price signal to reduce the use of fossil fuels. Studies show that consumers generally respond to higher gasoline prices by reducing consumption.” That assumption proved to be wildly optimistic.
On the heels of the latest increase in the tax, Environment Minister Terry Lake has tried to prop up the government’s flawed reasoning with a report that suggests B.C. reduced greenhouse gas emission by 4.5 per cent — or three million tonnes — between 2007 and 2010.
The only problem is that none of that decrease can be attributed to the tax. In order to arrive at such a conclusion, gas consumption would have had to drop dramatically.
In fact, gasoline sales have increased each year since the carbon tax has been in place. Stats Canada reports that between the years 2008 and 2010 annual gasoline sales increased by 300,000 litres. Oddly, in the year before the gas tax was introduced gasoline sales had fallen 70,000 litres.
That reality has forced Lake to chase his own report with a guesstimate that the majority of the drop in greenhouse gas emissions was due to impacts of the global recession.
Regardless, Lake says: “There are no plans to get rid of the carbon tax.” Then comes the political quid pro quo: “But when you’re a leader, you expect others to follow. When other jurisdictions aren’t following, you do get into a problem of competitiveness.”
Finance Minister Kevin Falcon, who is increasingly at odds with his premier, has also expressed concerns about B.C. being the only North American jurisdiction with such a tax.
He is currently conducting a “comprehensive” review of the tax and is seeking written submissions until Aug. 31. Falcon says he wants to look at the impact of the tax on the competitiveness of businesses such as the agricultural sector.
While the carbon tax is technically revenue neutral for government, many of the offsetting tax cuts do not help the average consumer.
In 2008, the offsetting tax breaks split 66 per cent to individuals and 33 per cent to business.
That is no longer the case.
By the 2013/14 tax year it will be 33/66 in favour of business, a 100 per cent reversal of the original intention that individuals would benefit more than business.
It is hard to recall another tax that has taken so much hard-earned cash out of the pockets of fuel-dependant, road-weary consumers and delivered so little in return.
Axing the tax would be a refreshing game changer for the Liberals. M