BC carbon tax not revenue neutral anymore
A version of this commentary was published in the Financial Post October 3rd, 2017
The nationally vaunted “revenue neutral” BC carbon tax has finally taken off its mask. The carbon tax in Canada’s western most province is now just another bare-faced tax grab designed to pinch money from your wallet and plunk it into government coffers.
The new BC government made the announcement during their mini- budget presentation in Victoria, stating that the BC carbon tax would increase to $50 per ton by the year 2021, a full calendar year ahead of the federally imposed schedule. It will also no longer be “revenue neutral.”
In fact, the BC carbon tax hasn’t been “revenue neutral” for British Columbians in many years and successive governments have been using creative accounting exercises to make it appear that way on the books. In February, the Fraser Institute reported that the Christy Clark government was using pre-existing tax credits to make the carbon tax seem revenue neutral. If the out-dated credits were removed from the balance sheet, however, it showed the carbon tax stopped being “revenue neutral” back in 2013-14 and was hitting British Columbians with a cumulative tax increase of $865 million, or $728 for a family of four. The BC Liberals subsequently removed some of the older credits to attempt to bring the tax back into balance for their final budget, however, the newly elected NDP government has abandoned the charade of making the carbon tax appear revenue neutral altogether.
Ratepayer watchdogs, including the Canadian Taxpayers Federation, had long warned revenue neutral carbon taxes might be revenue neutral for governments, but they’re never revenue neutral for families. Further, allowing government to set an arbitrary price on an element that is emitted by nearly every action our modern civilization was bound for permanent escalation and abuse. Now that warning has unfortunately come true and it is at risk of not being heeded by many other provincial governments across the country. We are on the path to ever-increasing taxes under the guise of stopping global climate change, and BC is leading the way.
How much will the carbon tax cost us users of carbon? Taxpayers have paid federal government bureaucrats to do these calculations, so the numbers are known, but the Trudeau government is refusing to release the information in Parliament. Internal federal government documents recently obtained by Blacklocks Reporter, an investigative journalism online news site that drills into Parliamentary business with an auger, show that the federally forced carbon tax of $50 per ton, set to be in place by the year 2022, will cost Western Canadian crop farmers $3,705 per year and will not reduce their carbon dioxide emissions.
Crop farmers use diesel to operate their combines to harvest grains and seeds so they can feed Canadians and plenty of others around the world. A $50 per ton carbon tax will tack an extra 13.5 cents per litre of diesel sold in Canada – the cost of which is already 32 per cent taxes. An intriguing part of the obtained document notes that farmers in Saskatchewan have already reduced their carbon dioxide emissions with no carbon tax. The magic lever? It wasn’t government. It was the scientific innovation of more efficient machinery, better soil management and better plant genetics – managed by people who know their land best: the farmers and business owners themselves.
What about people who aren’t farmers? How much is it going to cost them? It’s difficult to get a straight answer out of government, but reports say it will cost drivers 11.6 cents more per litre of gasoline and it will take an extra $50 per month away from people in BC. Double that for folks in Nova Scotia who depend more on coal and oil for power and heat. Those are just preliminary estimates and we would be folly to forget that when government is involved it always winds up costing more than we were even told.
For those who want to believe that these imposed carbon taxes are only meant to curb bad behaviour – the sin of heating your home and driving your car – until the bad behaviour stops, or until the environmental emergency passes, we have examples that this is untrue. The state of Washington has noticed that drivers have worked hard to reduce their use of gasoline. They are car-pooling, moving to transit corridors and buying more fuel-efficient vehicles to skip paying at the pump. Good for the environment, right? The government bean counters, however, have noted that also means that gasoline tax revenues could fall by 45 per cent in the next 18 years. Washington State is now exploring “road usage fees” also known as tolls, also known as taxes, to replace the sin tax being lifted from the recently absolved.
The moral of the revenue-neutral-this-is-for-the-environment-carbon-tax story is this: taxes are just taxes. Those taxes are dollars taken from people by government. The government – both elected and bureaucracy – is just a collection of well-paid people with varied political opinions and varied expertise who get to decide how to spend your money and alter your behaviour. Government will continue to grow and spread and need more sustenance in the form of taxes until it is pruned back by ratepayers and voters who are fed up with paying more than 40 per cent of their income to that ever-spreading bureaucratic briar patch.
Kris Sims is the BC Director of the Canadian Taxpayers Federation