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B.C. introduces carbon tax, diesel to rise 8.27 cents/litre by 2012

VICTORIA, B.C. -- B.C. has become the first North American jurisdiction to institute a "carbon" tax which is aimed ...

VICTORIA, B.C. — B.C. has become the first North American jurisdiction to institute a “carbon” tax which is aimed at reducing the province’s use of fossil fuels.

The new tax was announced yesterday as the province unveiled its 2008 budget. The province stressed the new tax will be revenue-neutral. It will also be accompanied by a one-time payment of $100 to each citizen of the province, which the government hopes will be used to adopt a greener lifestyle.

In the meantime, the trucking industry can expect to shell out more money for diesel. As of July 1, diesel will increase by 2.2 cents/litre. But that will rise to 8.27 cents/litre by 2012.

“This budget marks a turning point,” Finance Minister Carole Taylor announced yesterday afternoon. “It overturns the notion that you have to choose either a healthy environment or a strong economy. It will help keep British Columbia vibrant and growing, it takes a big step toward meeting the challenge of climate change, and it strengthens key public services like health care and education.”

The budget also contains $1 billion for climate action programs and tax incentives. They include promoting the use of biodiesel and also programs that will improve air quality at truck stops. The legislature must first approve the new tax. Legislation must then be tabled each year to prove the revenue raised will be returned to businesses and individuals.

“The principle is simple,” said Taylor. “Tax carbon-emitting fuels to discourage their use, and give the money back to people, back to businesses, so they have control. They can make their own choices about how the tax affects them. At the same time, by making greener choices more commercially viable, it will stimulate innovation and open up new economic opportunities across British Columbia.”

Over the next three years, the carbon tax is expected to generate about $1.85 billion.

Paul Landry, president of the B.C. Trucking Association told the Vancouver Province that each long-haul truck will see fuel costs jump about $1,000 this year.

“It will be difficult to pass on higher transportation costs to customers because trucking companies are locked into contracts or serving industries such as the troubled forestry sector, where there’s little room to raise rates,” he pointed out.

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