A Tax That Makes Sense. Finally, Eh?

The BC Government has just released its budget for the 2008 fiscal year. A pretty calm budget, there was something smart worked in. The BC Government is the first in Canada to provide a concise carbon-tax, taxing people based on how much carbon-based fuel they burn.

Of course, they chose to provide an offset to the electorate in order to hopefully not cost anyone too much more money. Every person and child in the province will be written a cheque for $100 this spring and they have also announced a lowering of the lowest tax rate, money earned under $70,000/year, by five points, making it the lowest in Canada. As a further measure, they will lower the commercial rate by one percent immediately, to 11%, and then to 10% in 3 years. The total tax rate in 3 years for a business will be 25%, when Federal tax is mixed in, 10% lower than most US Jurisdictions.

The tax is currently $10 of tax per tonne of CO2 emissions, rising by $5 yearly until it reaches $30/tonne in 2012. This translates into an increase of 2.4 cents per litre for gasoline and 2.8 cents per litre for your home heating oil. If you're burning 50 litres per week (already a fair bit), it's the equivalent of a cup of coffee per week. This rate isn't too steep, so do your math before you lash back!

This plan isn't fool proof, you can be guaranteed many people will not be happy with the idea. But it frees up the income of those who are saving energy, providing potentially huge savings to the residents of downtown Vancouver, big users of public transit. It will encourage others to make a decision too, a decision as to whether they should continue burning ridiculous amounts of fuel, or switch to something more efficient and use the money saved to buy something cool, or pay off debt, or save for retirement. Do what you want. Just stop driving so much!

Of course, the Finance Minister, Carole Taylor, took this as an opportunity to jab at the rest of the country, pointing out that they led the introduction of aerobics, whole-wheat breads and overall healthier lifestyles. Perhaps Premier Ghiz of PEI took take a page out of this book for his second budget, due out within a month or two. Last year, he lowered the tax on gas and delayed the opening of a wind farm project. Two very environmentally sound decisions, right?