A recent Canadian Energy Research Institution (CERI) study found (among many things) that the BC carbon tax policy boosted economic activity in some areas but had no significant effect on emissions. Since the objective of regulatory policy was to reduce emissions, these results suggest that the carbon tax policy in British Columbia has failed to achieve its goal. (Market oil prices have been found to have more of an effect on emissions in BC than the carbon tax. We talked in the pilot episode of our podcast about the fact that roughly 52% of the gas price you pay at Vancouver & BC pumps is direct taxation! Click the link to watch the video!)

Unfortunately, the CERI report also suggested strengthening existing regulations and adding new carbon policies and actions, especially those that can deal with carbon leakage but also the price per tonne of CO2age. Some at CERI believe that current carbon prices in many jurisdictions remain insufficient to achieve the objectives of the Paris Agreement, even with extended carbon pricing policies in place. CERI concludes, “Stronger complementary policies and actions are needed to achieve the total reductions in GHG emissions in the case of the BC carbon tax…”

With all due respect to the researchers involved, we believe that this proposed radical increase in government cost (and power) is a recipe for disaster. We believe the Paris Agreement has been a disaster. We believe that carbon taxes are a public tragedy that makes all our lives more expensive.

 

Taxing Primary Energy Sources – Input Costs Are Always Passed On To You, the consumer.

The carbon tax in British Columbia is currently $40 per tonne. It was supposed to have gone to $45 in April 2020, but the increase was deferred due to the impact of the COVID-19 pandemic on the economy. It is interesting that, in making this deferral and stating that a negative impact on the economy was too much to bear, the government has inadvertently admitted that the government policy on carbon taxation can and likely will have a negative impact on the economy. And that an increased amount of taxation would likely worsen the impact.

It’s no secret that public energy companies like BC Hydro have amassed enormous public debt while claiming to be profitable. We know one day, we will have to bail them out as tax-payers. When you start to stack up all of the public debt, public monopolies (lack of choice & competition!), along with the over-regulation of energy production, and then all of the carbon taxes and metro fuel taxes, public transit taxes and federal excise taxes, the sales taxes and income taxes, home-owners taxes and utilities taxes…

…we begin to see a different picture.

As Ross McKitrick of the Fraser Institute put it back in 2017, “While a carbon tax might have virtuous intentions, it is nonetheless a tax, and like all taxes it both imposes its own burdens and amplifies the economic costs of all the other taxes in the economy. These secondary effects matter.”

And he’s absolutely correct! When the input cost for a business goes up (such as putting fuel in company vehicles) these costs are always passed on to the customers. Business owners don’t keep a separate bank account throughout the year where they save up spare change to pay their taxes. This added cost is simply another business expenditure and the price of the products being offered is adjusted accordingly.

You, the customer, end up paying.

Taxing primary energy sources causes more harm than good! A tax on energy is a tax on everything that takes energy to move. If the current taxes are documented to be inefficient, why are we all still paying for them? Yet some “experts” have proclaimed that the carbon tax would be more effective in curbing emissions if it were higher; up to $80 per tonne in 2020 and up to $100 per tonne by 2030, as well as removing certain exemptions, they suggest. Others across the globe have suggested significantly higher amounts. But if the carbon tax hike has to be delayed because of the economic down-turn, why should we assume that the carbon tax hikes will ever be GOOD for the economy?!

 

The evidence so far suggests we’ve accomplished very little apart from making gasoline more expensive for working families. The evidence suggests we’re hampering our economy and producing no discernible reduction in carbon emissions. In British Columbia the widely-applauded “revenue-neutral carbon tax” stopped being revenue-neutral back in 2014 and the government profits from this tax to the tune of $865 million in the 2018-2019 budget. B.C. estimated it would spend $53.6 billion in 2018/2019. Therefore, a 2% spending cut would have easily offset the lost government revenues from the repeal of the carbon tax. If the government in Victoria were capable of just a tiny hint of financial discipline, this would be easily accomplished.

The BC Libertarian Party is the only party in British Columbia planning to scrap the fuel tax and axe the carbon tax in their entirety, for every British Columbian, and to openly pay for the much-needed public infrastructure projects across BC out of general tax revenues for the province… which is usually what the government ends up doing anyways! We are the only Party that will force the BC government to give up cold-turkey on it’s destructive addiction to these new carbon tax revenues. We are the only Party that will force the BC government to start living within it’s means.

We are also the only Party suggesting that we need a plan to continue increasing our domestic oil & gas products in a safe and responsible manner. BC only has two oil refineries — one in Prince George that produces about 12,000 barrels a day and one in Burnaby that has a capacity of about 55,000 barrels a day. The Burnaby refinery provides some gas to Metro Vancouver and Vancouver Island, but it does not come close to meeting the region’s fuel demands. To make up the short-fall, British Columbia imports  petroleum from Alberta through the Trans Mountain Pipeline or from other countries. (The Cherry Point Refinery in Washington State is also a major source of gas for BC). Rather than constantly engaging in lose-lose situations that tend to hurt British Columbians, we should be focused on creating new jobs in the private energy sector right here in BC. Canadians already have the highest standards for environmental safety and we can and should continue that proud tradition.

We are your BC Party for lower taxes, more choice and real freedom.

Come see what we’re all about.

Kyle McCormack

Party Secretary

BC Libertarian Party

You’ll note that this article didn’t spend time debating the issue of whether or not GHG emissions represent a significant threat to the environment; this is because people are worried about emissions and CO2 enough such that it plays a role in shaping public policy, including direct taxation. If politicians are willing to tax us and write laws based on this fear, it’s enough of a reason to develop an effective and meaningful counter-position. And with the federal carbon taxes set to escalate by $10/tonne/year, leading to a $50/tonne federally mandated level in 2022, we don’t have time to waste.