VICTORIA -- Driving and other fuel-dependent activities are about to get more expensive as British Columbia becomes the first jurisdiction in North America to introduce a consumer-based carbon tax.
"We have to find a way that we can work toward improving our environment, but at the same time do it in a way that keeps our economy strong," said B.C. Finance Minister Carole Taylor, as she presented a provincial budget that, aside from the carbon tax, commits $1 billion over four years to fight climate change.
The $37.7-billion budget also promises an additional $2.9 billion over three years for health-care spending. That brings the total health budget to $13.8 billion for the coming year.
Taylor said the new carbon tax will begin July 1, starting at a rate that will have drivers paying about an extra 2.4 cents per litre of gasoline at the pumps.
If you drive a Prius hybrid, the government estimates the new tax will cost you about $20 extra per year. If you have a Dodge Ram pickup truck, that number will be closer to $68.
The tax will apply to virtually all fossil fuels, including gasoline, diesel, natural gas, coal, propane and home heating fuel. It will increase each year until 2012, reaching a final price of about 7.2 cents per litre at the pumps.
After that, Taylor said, it will rest with the government of the day to decide if the tax rate should change any further.
"We've promised you green and today we've delivered green," said Taylor.
"The carbon tax will start at a relatively low rate to give businesses and individuals time to adjust. As it rises, it will underline the fact that there is, indeed, a cost attached to generating greenhouse gases."
To help people adjust to the cost of the tax, all B.C. residents will receive a one-time $100 cheque in June.
Corporate and personal income tax rates will drop to help make the tax revenue-neutral.
Still, estimates suggest businesses will pay two-thirds of the carbon tax, and will receive only one-third of the refunds. By contrast, individuals are expected to pay one-third, while receiving two-thirds of the credits.
The move was seen as a huge win by environmentalists, who depicted B.C. as a leader in taking action on climate change.
However, Laura Jones, vice-president at the Canadian Federation of Independent Business, said the tax isn't the best way to become environmentally friendly.
"I think they were pretty quick to pull out the stick when it comes to accomplishing environmental objectives," she said, explaining she would rather have seen a greater focus on education and incentives.
-- Canwest News Service
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