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Forget the Praise: BC's Carbon Tax Is a Failure

Higher emissions, slow growth, regressive taxation. Sorry, what's to celebrate?

By Bill Tieleman 8 Mar 2016 |

Bill Tieleman is a former NDP strategist whose clients include unions and businesses in the resource and public sector. Tieleman is a regular Tyee contributor who writes a column on B.C. politics every Tuesday in 24 Hours newspaper. E-mail him at or visit his blog.

"Let's cut the crap about B.C.'s carbon tax. The impact of the carbon tax has been overstated by people who love carbon taxes, and it's annoying that the tax has generated so much uncritical praise." -- Marc Lee, pro-carbon tax economist.

To hear it from Premier Christy Clark, our province is a beacon of trailblazing perfection in the battle against climate change.

And the crowning glory of B.C.'s efforts is the carbon tax introduced in 2008. The tax now adds 6.67 cents a litre to the price of gasoline and imposes costs on other fuels for residents and industries.

"We think in British Columbia a carbon tax is a really successful way to go," Clark said in November 2015 before jetting to the Paris climate change talks.

Cue the applause, from the New York Times to the Organization for Economic Co-operation and Development to new group Smart Prosperity that launched last week in Vancouver, with none other than Prime Minister Justin Trudeau to validate Clark's claims that you can price carbon and reduce greenhouse gas emissions -- without hurting your economy.

The only problem is that B.C.'s carbon tax doesn't work.

Whether you look at greenhouse gas emissions or economic statistics, B.C. carbon tax has tanked.

Marc Lee, senior economist for the Canadian Centre for Policy Alternatives in the province, likes carbon taxes. But "don't believe the hype on B.C.'s carbon tax," he says.

"The reality is that since 2010, B.C.'s GHG emissions have increased every year; as of 2013 they are up 4.3 per cent above 2010 levels," Lee writes on the CCPA website.

Even on a per capita basis, emissions have risen.

"We see the recession-induced drop in 2009 and 2010, then increases from 13.5 tonnes per person in 2010 to 13.7 tonnes per person in 2013," Lee says.

Lee points out that two-thirds of B.C.'s greenhouse gas increase is because of growth in the natural gas industry, which Clark boasts is better than other fossil fuels. And that's without a single liquefied natural gas plant being built.

Unfair and regressive

OK. Greenhouse gas emissions went up. But surely there's better news on economic growth?

"B.C.'s economy did not collapse due to the carbon tax, but nor did it grow faster than its neighbours," Lee writes.

In fact, Alberta's gross domestic product grew 22 per cent from 2010 to 2014. Saskatchewan's GDP grew 15 per cent, B.C. lagged with 11-per-cent growth. The gap is similar if you compare growth since 2007, before the carbon tax.

Nor is the carbon tax fair. It's a regressive tax that benefits big business and the wealthy at the expense of lower- and middle-income earners.

The Liberals pledged to offset the carbon tax with reductions in other taxes. But those have favoured businesses, not families.

"Most of the carbon tax revenues (2/3) have been in support of corporate income tax cuts, plus 17 per cent to personal income tax cuts, 12 per cent to a credit for low-income households, and small amounts for a bunch of boutique credits, some of which have nothing to do with carbon," Lee writes.

"The low-income credit, in particular, offset the carbon tax for the bottom 40 per cent when it was first introduced in 2008," Lee writes, "but as the tax has gone up, the credit has not, making that whole regime regressive -- that is, low-income households pay a greater share of their income to the tax than higher-income households."

That low income tax credit amounts to up to $115.50 a year per person -- little more than a couple of tanks of gas.

Enviros hell-bent for a tax

So the B.C. carbon tax hasn't reduced greenhouse gas emissions, might have slowed economic growth and hurts the poor while benefitting the rich -- and for this it's praised?

OECD secretary-general Angel Gurria is among the misinformed.

"The implementation of British Columbia's carbon tax is as near as we have to a textbook case, with wide coverage across sectors and a steady increase in the rate, from $5 to $30 per ton over a period of five years," Gurria wrote.

It may be a textbook case all right -- of not doing your homework.

And the New York Times' Eduardo Porter wasn't going to let the facts get in the way of a good story either, claiming: "British Columbia's economy did not collapse. In fact, the provincial economy grew faster than its neighbours' even as its greenhouse gas emissions declined."

Errr, no, that's wrong on both faster growth and declining GHGs.

And Smart Prosperity, the new think tank which loves B.C.'s carbon tax as it purports to promote a "greener, more competitive Canadian economy," receives some of its funding from Shell Canada -- which owns 60 per cent of the Athabasca Oil Sands Project that produces 255,000 barrels of synthetic crude per day, along with its gas stations, refineries and oil facilities.

But why are otherwise credible organizations and individuals missing the facts?

Partly because some in the environmental movement were hell-bent for a carbon tax and willing to sell their ecological souls to former Liberal premier Gordon Campbell -- with his government's horrific record of slashing environmental protection -- in order to achieve North America's first carbon tax.

A low point came when noted green activist Tzeporah Berman presented Campbell with an award in Copenhagen in 2009 for his "climate action leadership."

"B.C. is being recognized for climate leadership for legislating aggressive targets to reduce emissions, banning conventional coal-fired electricity, and implementing North America's first broad based revenue neutral carbon tax," said a statement from 10 environmental groups, including World Wildlife Fund Canada, the David Suzuki Foundation, Environmental Defence, Forest Ethics and the Pembina Institute.

Berman and Suzuki supported Campbell and attacked the B.C. New Democrats during the 2009 provincial election over the NDP's opposition to the carbon tax, drawing furious responses from other environmentalists.

And not a dime for bike lanes

B.C.'s carbon tax also fails to deliver because it doesn't fund a single green initiative -- not one dime from it pays for bike lanes or buses or wind turbines.

The model introduced by Campbell and then-finance minister Carole Taylor -- now advising Clark -- reduced corporate and personal income taxes to compensate for the higher tax on gas and other fuel, with revenue neutrality the promise.

That means the tax is regressive, because average British Columbians pay a higher percentage of their income on gas, heating fuel and other carbon-taxed products. A cut in the progressive income tax -- where the more money you make, the more you pay -- was "balanced" by a hike in a regressive sales tax on fuels.

And for northern and rural residents, the carbon tax is even more unfair. They have little or no access to transit and face higher heating costs, which went up with the carbon tax.

So while Vancouver millionaires got a big tax break to buy a new $100,000 Tesla electric car, the Surrey mom or Prince George dad got dinged for higher gas and heating costs.

But don't expect the converted to contradict carbon tax catechisms. That would mean having to find real solutions, with empirical evidence to back up their claims. Something carbon tax backers have failed to do.  [Tyee]

Read more: BC Politics, Environment,

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