From 2008 to 2012, per-capita consumption of fuels subject to British Columbia’s carbon tax fell by 17.4 per cent, while during the same period, per-capita gross domestic product in B.C. fell by 0.15 per cent — a slightly better economic performance than the Canadian average of minus-2.3 per cent.
The Ottawa-based think tank Sustainable Prosperity says this makes B.C.’s controversial carbon tax a public-policy environmental and economic “success story.” Naturally, since the report was released last week, the blogosphere has been full of commentary from all manner of experts and ordinary Joes and Jills disputing the claim. Some seem to feel the numbers are skewed because many Lower Mainlanders living close to the border fill up in Washington State, while others claim Sustainable Prosperity cherry-picked the statistics it felt would support its premise. Still others say the tax doesn’t go far enough because airline fuel, and certain industries, aren’t subject to the tax when they should be.
Details, details. Fact is, the carbon tax brought in by the B.C. government in 2008 was the most progressive thing Gordon Campbell’s government did in more than 10 years in power. It works, because when it was brought in, it wasn’t just a new tax — it was a tax shift. Back in 2008, personal income tax was reduced — so while fossil fuel use was discouraged, employment and investment were encouraged. Stewart Elgie, a University of Ottawa professor of law and economics and one of the report’s authors, stressed that with only four years of data, the reduction in fuel use may not be entirely attributable to the carbon tax. But the numbers seem to support that conclusion.
So to Christy Clark and her government, we say: Don’t ax the tax. Tweak it. Work to ensure that industries not currently paying the tax are brought into the fold while offering investment incentives; put more of the money collected directly into public transit and other “green” initiatives; consider increases to the Low-Income Climate Action Tax Credit threshold to help offset the impact of recent sharp increases to the cost of home heating and transportation on struggling families.
Despite what may free-enterprisers may say, carefully thought-out, progressive government policies can make a difference. B.C.’s experience with the carbon tax proves it.
— David Burke