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British Columbian Businesses Call For Carbon Tax Changes

by Mike Godfrey, Tax-News.com, Washington

01 April 2016

More than 130 British Columbian businesses have signed an open letter to the provincial Government calling for an annual CAD10 (USD7.70) per tonne increase in the carbon tax from July 2018.

The letter was initiated by the Board of Change BC, Climate Smart Businesses Inc., Pembina Institute, and Clean Energy Canada.

The recommendation for an annual increase in the carbon tax was put forward by the Climate Leadership Team (CLT). The CLT was set up in April 2015, and comprises leaders from British Columbian businesses, First Nations, local governments, academia, and the environmental sector.

In its final report, the CLT called for the application of the carbon tax to all greenhouse gas emission sources in British Columbia after five years. It said that the current low-income and rural and northern tax credits should be adjusted to ensure the most vulnerable are not adversely impacted, and establish targeted and transparent mechanisms for emission-intensive, trade-exposed sectors that mitigate any competitiveness issues created for those sectors.

The CLT said the revenues generated by an increase in the carbon tax should be used to reduce the provincial sales tax (PST) from seven to six percent, and to eliminate the PST on all electricity rates. It also suggested that the revenue helps fund measures to facilitate investments in technology and innovation that reduce greenhouse gas emissions, and to provide local governments with funding for projects that will reduce emissions.

The businesses that signed the letter also endorsed these recommendations. "The combined fiscal package finds a good balance between economic, environmental, and social objectives," their letter noted.

According to the letter, British Columbia's economy would benefit from a strengthening of the carbon tax regime. It pointed out that, during the first phase of the carbon tax's implementation, "the province's economic growth outperformed the rest of the country, and studies that examined B.C.'s carbon tax in detail found no impact on economic growth." The CLT estimated that British Columbia's gross domestic product (GDP) would grow by an average of 2.1 percent a year under its recommendations.

The letter also argued that the province's clean energy and clean technology businesses would thrive if the carbon tax were modified. "They are well positioned to help B.C. continue its transition to a clean energy economy, and help meet a rapidly growing global demand for those solutions," it explained. As of 2014, more than 68,000 British Columbians work in clean energy jobs.

Finally, the letter stressed that British Columbia's businesses will become "better partners in reducing carbon pollution." It stated: "Close to one-third of B.C.'s carbon pollution is under the direct control of the province's 170,000 small- and medium-sized businesses, which employ more than one million people. We are part of the solution when we work in energy efficient buildings, drive cleaner vehicles, and reduce waste. Strengthening the carbon tax in conjunction with incentives like a tax credit will encourage businesses to accelerate investment in solutions like training, technology, retrofitting, and improved processes."

TAGS: environment | Energy | tax | investment | business | sales tax | energy | training | gross domestic product (GDP) | tax credits | carbon tax | Canada | trade

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