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Critics question carbon tax grants for greenhouse sector

The British Columbia government announced today it will give greenhouse businesses back what it collects from the sector in carbon tax, a move critics say will have other industries wanting the same treatment.

Agriculture Minister Don McRae said today there will be $7.6 million in grants available through the B.C. Greenhouse Growers' Association and the United Flower Growers Cooperative Association. The amount matches what the industry, which uses a lot of natural gas, was expected to pay in carbon tax.

The government's press release quoted BCGGA President Peter Cummings saying the grants will help B.C. growers "better compete with producers in the U.S.A. and Mexico."

"It seems pretty surprising considering this encourages other industries to lobby for carbon tax relief as well," said Joel Wood, the Fraser Institute's senior research economist in the centre for environmental studies and centre for risk and regulation.

"The broadest base for a carbon tax is the lowest cost way to achieve emissions reductions," he said.

The government has argued that the grants make sense since greenhouse growers were already up to date technologically when the carbon tax came in and there were few ways for them to cut emissions. Wood said that logic is like giving people who drive Prius cars, who already spend less on gas than other drivers, an exemption.

"If B.C. decides to make changes to the carbon tax, those decisions should be based on solid evidence that a change is needed," said Matt Horne, director of the Pembina Institute's climate change program, in an email. "I haven't seen any evidence that the carbon tax and accompanying tax cuts are harming the agricultural sector, so this decision doesn't appear to meet that bar."

It would make more sense to use carbon tax revenues to keep sectors competitive by helping them to use energy more efficiently and to use cleaner sources of energy, he said. "Today's announcement might help make greenhouses more competitive, but it also undermines the province's climate change objectives."

NDP finance critic Bruce Ralston questioned making the announcement while the government is in the middle of reviewing the carbon tax. "Usually when you do a review you don't make policy decisions in the middle of the review," he said. "Clearly their carbon tax policy is in a shambles."

British Columbia's carbon tax was to be revenue neutral, with money collected under it given back as tax cuts and credits. The greenhouse industry would have benefitted since 2008 from cuts to corporate income tax rates, small business corporate income tax rates and school property taxes.

The Tyee asked an agriculture ministry spokesperson how much money is going back to the greenhouse industry through the carbon tax's revenue neutrality provisions, but did not receive an answer by publication time.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Find him on Twitter or reach him here.

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