CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. New British Columbia Gov't Hikes Carbon Tax

New British Columbia Gov't Hikes Carbon Tax

by Mike Godfrey, Tax-News.com, Washington

12 September 2017


British Columbia's new NDP Government has announced that it will increase the carbon tax by CAD5 per tonne a year for four years, starting on April 1, 2018.

In a budget update, Finance Minister Carole James said that the rate per tonne of CO2 equivalent emissions will rise each year from its current level of CAD30 (USD25) until it reaches CAD50 per tonne in 2021.

In addition, the obligation on the Government that the carbon tax regime must be revenue neutral will be lifted. The revenue raised will be used "to support families and fund green initiatives to address our climate action commitments," James explained.

Carbon tax revenue is forecast to increase by an average of 11.6 percent a year over the three years to 2019-20.

To offset the impact of the increases on those on low and modest incomes, the Government will introduce improvements to the low income climate action tax credit. The maximum annual amount per adult will increase from CAD115.50 to CAD135, and the maximum annual amount per child will increase from CAD34.50 to CAD40. Single-parent families will continue to receive the adult amount for the first child in the family.

The carbon tax was introduced in 2008 at CAD10 per tonne of CO2 equivalent. It was gradually increased until it reached CAD30 per tonne in 2012. The former Liberal Government had committed to keep the rate at CAD30 per tonne until 2018.

In 2016, the Climate Leadership Team recommended an annual increase in the carbon tax of up to CAD10 per tonne from 2018. In its response to the report, the then Liberal Government said that the tax would only rise if it remained revenue-neutral and if every dollar was returned to residents in the form of tax relief.

The Pan-Canadian Framework on Clean Growth and Climate Change, signed by the federal, provincial, and territorial governments (with the exception of Saskatchewan) last December, endorsed the federal Government's proposal for a benchmark for pricing carbon pollution, to be implemented by 2018. Provinces and territories are permitted to implement either an explicit price-based system or a cap-and-trade system.

Provinces with a price-based system will be required to have a rate of CAD10 per tonne in 2018, which must increase to CAD50 per tonne by 2022. According to the Government's budget documents, because British Columbia "has had a broad-based carbon tax since 2008 at a price that exceeds the federal benchmark, it is expected that the proposed federal carbon pricing system will not apply" in the province.

The proposed rate rise was welcomed by the Pembina Institute, which has campaigned for such action. Maximilian Kniewasser, director of the Institute's B.C. climate policy program, commented: "B.C.'s carbon tax has been an economic and environmental success, and it makes sense to build on this policy."

"Well-designed policy will protect vulnerable Canadians from potential adverse impacts, and address competitiveness concerns in B.C.'s industry by maintaining a strong economy. Using revenue to increase the climate action tax credit will ensure that low- and middle-income families will also benefit from the transition to a clean energy economy."

He added: "Carbon pricing is one of the tools clean tech entrepreneurs cite as key to supporting clean innovation. By increasing the carbon tax, B.C. is providing longer term certainty and setting the foundation to build on its existing clean tech industry to become a global powerhouse in this rapidly growing sector."

TAGS: environment | tax | pollution tax | energy | entrepreneurs | budget | ministry of finance | tax rates | carbon tax | Canada | tax reform | trade

To see today's news, click here.

Leave a comment

Read our Posting Guidelines

 






Close

Password Reminder

Please enter your email address to receive a password reminder.

 

Log into Tax-News+
Not registered yet? Find out about our daily news alert service »

 Email: 
 Password: 

Login »

Forgotten your password?







Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Tax-News+ Updates

Receive FREE daily updates from Tax-News.com, straight to your inbox. Register Now!

For a tailored solution, choose to receive selected news updates for your preferred jurisdictions and topics, with our enhanced Tax-News+ subscriber service. Read more...

 

Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »