Carbon tax review
As announced in Budget 2012, over the next year the government will undertake a comprehensive review of the carbon tax and its impact on British Columbians. The review will cover all aspects of the carbon tax, including revenue neutrality, and will consider the impact on the competitiveness of B.C. businesses such as those in the agriculture sector, and in particular, B.C.’s food producers.
British Columbians can make written submissions to the Minister of Finance, and these will be considered as part of the 2013 Budget process.
Overview of the revenue-neutral carbon tax
The revenue-neutral carbon tax was implemented on July 1, 2008, and the final scheduled increase will take effect on July 1, 2012. No further rate increases or expansions are planned at this time.
The tax puts a price on carbon emissions to encourage individuals, businesses, industry and others to use less fossil fuel and reduce their greenhouse gas emissions. The initial tax rate was relatively low and has increased gradually to allow families and businesses time to reduce their emissions. The tax is also intentionally broadly based and paid by all those who consume fossil fuels in the province.
The carbon tax is revenue neutral, meaning every dollar generated by the tax is returned to British Columbians through reductions in other taxes. Tax cut measures include income tax credits for low income individuals, cutting the first two personal income tax rates by 5 per cent, providing northern and rural homeowners a benefit of up to $200 annually, and reducing the business taxes.
The Minister of Finance is required by law to annually prepare a three-year plan for recycling carbon tax revenues through tax reductions. This plan is presented to the Legislative Assembly at the same time as the provincial Budget. The Revenue Neutral Carbon Tax Plan and Report presented in Budget 2012 shows the tax reductions that return carbon tax revenues to individuals and businesses.
British Columbians now have the opportunity to make written submissions to the Minister of Finance from July 1, 2012 – August 31, 2012.
Submissions can be emailed to the Minister of Finance or mailed to:
Carbon Tax Review
c/o Tax Policy Branch
Ministry of Finance
PO Box 9547 Stn Prov Govt
Victoria BC V8W 9C5