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BCs Carbon Tax Shift After Five Years

An Environmental (and Economic) Success Story July 24, 2013

British Columbias pioneering carbon tax shift, passed in 2008, has been remarkably effective in reducing fuel use, with no apparent adverse impact on the provinces economy. These findings come from a new study by Sustainable Prosperity researchers to be published in the upcoming issue of Canadian Public Policy, a highly respected academic journal.

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THE REPORTS KEY FINDINGS ARE THAT:

Since the carbon tax took effect (July 1, 2008), BCs fuel consumption has fallen by 17.4% per capita (and fallen by 18.8% relative to the rest of Canada). These reductions have occurred across all the fuel types covered by the tax (not just vehicle fuel) BCs GDP kept pace with the rest of Canadas over that time The tax shift has enabled BC to have Canadas lowest income tax rates (as of 2012). The tax shift has benefited taxpayers; cuts to income and other taxes have exceeded carbon tax revenues by $500 million from 2008-12. Stewart Elgie, Professor of law and economics at University of Ottawa, and the reports lead author, said: BCs experience shows that it is possible to have both a healthier environment and a strong economy -- by taxing pollution and lowering income taxes. Canadas premiers meet from July 24-26 to discuss a proposed Canadian Energy Strategy which includes a more integrated approach to climate change. Elgie commented: I hope that BCs success will inspire Canadas premiers to show leadership on a national approach to pricing carbon pollution. BACKGROUND On 1 July 2008, BC brought in North Americas first carbon tax shift. It imposed a price on the use of carbon- based fuels, with all the revenues going to fund corresponding cuts in other taxes The tax is a central component of BCs climate change strategy, which aims to reduce GHG emissions by 33 percent below 2007 levels by 2020 BCs carbon tax shift was designed to be revenue neutral; all the revenues are to be used to reduce other taxes mainly through cuts to income taxes (personal and corporate), as well as targeted tax relief for vulnerable households and communities resulting in no overall increase in taxation When introduced in 2008, the tax was initially set at $10 per tonne of carbon dioxide equivalent (CO2e). It was designed

 When introduced in 2008, the tax was initially set at $10 per tonne of carbon dioxide equivalent (CO2e). It was designed to rise by $5 per year thereafter until it reached $30 per tonne (roughly 7 cents per litre of gas) in 2012 Contact Information Stewart Elgie Stewart.Elgie@uottawa.ca 613-863-6934 Jennifer Wesanko jwesanko@sustainableprosperity.ca 604-347-5988 Related Materials: Read Full Report Here - BC's Carbon Tax Shift after Five Years - Results Download Full Report Here - BC's Carbon Tax Shift after Five Years - Results

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