Carbon tax rises, but its future is far from certain

According to the government’s numbers, the four- yearold carbon tax has been a good deal for British Columbia taxpayers. It’s expected to generate $ 1.28 billion in offsetting tax savings for citizens and businesses in the coming year, or about $ 110 million more than it takes in.

But has the tax, the first and only one of its kind in North America, also been good for B. C.?

According to Finance Minister Kevin Falcon, the jury is out.

Falcon’s first budget confirmed the final scheduled increase in the tax, which will take it to $ 30 a tonne as of July 1, but the minister put on hold any decision about what happens after that. ( The increase works out to about one cent a litre, bringing the carbon tax total to 6.67 cents a litre.)

He promised a review, complete with public input, to look at everything from its revenue neutrality to its impact on the competitiveness of B. C. industries, particularly the agriculture and food sector which has long complained that the tax puts it at a disadvantage.

When the tax was implemented, it came with a pledge of revenue neutrality, meaning that, as the rate and amount of money it takes in steadily grew over its first four years, offsetting measures would be introduced to keep the overall tax burden the same.

Initially, the tax was offset primarily with cuts to personal and corporate income tax. This year, with the carbon tax take rising by more than $ 200,000 in this budget to an all- time high of $ 1.17 billion, the new offsetting measures include the seniors’ home- renovation tax credit, the children’s fitness and arts credits, an increase to the venture capital tax credit for small business and the extension of training tax credits for individuals and employers.