Canada PoliticsEconomists hail B.C.’s carbon tax a success
For Canadian politicians, the phrase 'carbon tax' has become taboo.
Many will recall former Liberal leader Stephane Dion's noble attempt at trumpeting a national carbon tax during the 2008 election. The idea fell flat on its face almost as fast as Dion did. Former Liberal MP Ujjal Dosanjh went as far as calling the issue an "albatross" around his neck during the '08 campaign.
Well, maybe Dion was on to something.
According to an op-ed in the Globe and Mail — penned by economists Richard Lipsey and and Stewart Elgie along mining executive Ross Beatty — British Columbia's six-year old carbon tax has been very successful.
Essentially, the carbon tax puts a levy on each tonne of greenhouse gas emitted, with the expectation that it will elicit a powerful market response resulting in reduced emissions. For the average consumer, this means they pay an extra seven cents per litre of gasoline.
But in B.C., the Liberal government promised to keep the tax revenue neutral — in other words, the carbon tax would be offset by lower taxes elsewhere.
Low and behold, according to the writers of the op-ed, the government has kept its promise.
"B.C. now has the lowest personal income tax rate in Canada (with additional cuts benefiting low-income and rural residents) and one of the lowest corporate rates in North America.
"At the same time, [the carbon tax] has been extraordinarily effective in tackling the root cause of carbon pollution: the burning of fossil fuels. Since the tax came in, fuel use in B.C. has dropped by 16 per cent; in the rest of Canada, it’s risen by 3 per cent (counting all fuels covered by the tax). To put that accomplishment in perspective, Canada’s Kyoto target was a 6-per-cent reduction in 20 years. And the evidence points to the carbon tax as the major driver of these B.C. gains."
Moreover, polls suggest that the tax is still relatively popular among British Columbians.
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Not everyone is sold.
In an email exchange, Jordan Bateman of the Canadian Taxpayers Federation says they "hate it" and forwarded a link of their 2012 submission to the B.C. government asking them to repeal it.
In the submission, the CTF questions the true effects of the carbon tax on tackling emissions and argues that tax off-sets are not fairly distributed across the economy. — they claim some people are actually paying more tax.
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Whatever side of the debate you fall on, it's unlikely that a federal carbon tax will be an issue in the 2015 election.
Introducing another tax on gas, especially at a time when prices at the pump are at record highs, would be akin to political suicide.
Stephen Harper, Thomas Mulcair nor Justin Trudeau want to follow in the footsteps of Stephane Dion.
(Photo courtesy of The Canadian Press)
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