What do the carbon pricing changes in the BC budget mean?

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What do the carbon pricing changes in BC's budget mean?

Carbon price is currently 50 $ per tonne of emissions produced, which adds $0.11 per liter of gasoline. (File photo)

The British Columbia budget presented on Tuesday brings significant changes to carbon pricing. While the tax itself will increase significantly as of April 1, large emitters will soon switch to another pricing regime.

This year's budget includes more than $1 billion over three years to fight climate change by building more resilient communities, communities that will withstand all kinds of emergencies, from wildfires to heat waves to atmospheric rivers, Finance Minister Katrine Conroy announced on Tuesday.

The provincial budget has disappointed some environmentalists, however. Several observers deplored the fact that the protection of biodiversity was forgotten, or the lack of vision to transform the economy.

As for the greens, they hoped for the announcement of massive investments to improve the supply of public transport in underserved regions, such as Vancouver Island or the Sea-to-Sky corridor.

Others, like Climate Institute of Canada environmental policy expert Dale Beugin, instead praise the province for its efforts with carbon pricing.

British Columbia was Canada's leader in carbon pricing, and with these changes it continues to be, he says.

Introduced in 2008, a first in Canada, the carbon tax had increased little in recent years. The 2023-2024 budget confirms significant increases that bring the province in line with federal standards.

It is essential to use the carbon tax even if it is a bit controversial , we must have the courage and congratulate the government for having the courage to increase these taxes, adds the observer David Merner.

The price of carbon is currently $50 per ton of emissions produced, which adds $0.11 per liter of gasoline, $0.13 per liter of diesel and $0.10 per cubic meter of natural gas.

The price at the pump will increase by 3.3 cents per liter every year from April 1 until 2030 due to the increase in the carbon tax.

Beginning April 1, and each year thereafter on the same date, the carbon tax will increase by $15 per tonne to reach $170 per tonne in 2030.

Thus, this increase will result in an increase of 3.3 cents per liter each year, reaching $0.374 per liter in 2030.

We are starting to reach levels where it will accelerate investments in low-carbon technologies, rejoices the economist of the David Suzuki Foundation Tom Green.

At the same time, the province will increase its progressive tax credit for climate action. A family of four will be able to receive up to $900 per year starting in July 2023.

The tax credit, a federal payment sent four times a year, is applies to taxpayers under the threshold of $50,170 for a family or $39,115 for an individual.

“We see that 80% of families are going to be better off even with rising carbon prices. If they make changes in their lives to reduce their use of gasoline or gas, they are going to be better off.

—Tom Green, Economist at the David Suzuki Foundation

Victoria promises that by 2030, the majority of British Columbians will receive more than they pay for with the carbon tax.

For large emitters, the government must also implement a new provincial output-based pricing system.

The system, which will apply to the oil and gas industries, as well only to mining and forestry companies, will come into effect in 2024.

This major change has generated mixed reactions. The Greens fear, for example, that these tariffs will turn into gifts for large emitters.

It is a system that is not transparent, we do not know how it will be decided, what tax they will pay for carbon pollution, it is a big problem, judges the leader of the Green Party, Sonia Furstenau.

Even though the government suggests that the new standards will be stricter than Ottawa's, the bill tabled Tuesday afternoon after the budget was unveiled offers few details.

We will know more over the next year, but in general, they converge with what other governments in Canada are doing, observes Dale Beugin. This is how other provinces and territories protect the competitiveness of their major industries while maintaining incentives to reduce emissions.

By setting targets and tariffs that differ according to industries, output-based carbon pricing in theory helps ensure that those industries don't collapse and innovate to reduce their emissions.

It's not so different from what you see with households. Low-income families receive tax credits in the mail, which means they receive more money than they pay with this tax, adds Dale Beugin. Ultimately, the idea is to have incentives.

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