British Columbia does not want to increase the price of the carbon tax on April 1, and has unsuccessfully researched ways to try and get out of the change, says the province’s finance minister.
Brenda Bailey said with the province’s commitment to end the consumer carbon tax alongside Ottawa, the B.C. government does not want to go forward with a scheduled 19 per cent increase, to $95 per tonne, in April.
“We don’t want this increase,” she said in an interview Monday. “The premier doesn’t want this increase. But unfortunately we’re compelled to by the legislation.”
When asked if B.C. tried to find a way around the federal requirement to raise the tax, Bailey said, “we really looked at that” but she doesn't believe it’s possible until Ottawa repeals its federal consumer carbon tax legislation.
The April 1 increase will add more than three cents a litre to the price of gas at the pump, to almost 21 cents per litre total.
It’s unclear if Ottawa will act to repeal the consumer carbon tax before the April 1 increase.
Incoming prime minister Mark Carney, who won the federal Liberal leadership on Sunday, reiterated his pledge to make the move, but offered no timeline.
“My government will immediately eliminate the divisive consumer carbon tax on families, on farmers, and small and medium-sized businesses,” Carney said in his victory speech.
Premier David Eby reversed his government’s defence of the carbon tax before October’s provincial election, saying the “unsustainable hikes” at a time of rising cost-of-living was unaffordable for many British Columbians.
Once a policy darling of British Columbia, adopted at a national scale, the carbon tax had been fiercely opposed in recent years by right-leaning political parties, including the Opposition BC Conservatives.
It’s not clear how the NDP government could afford the lost revenue from the carbon tax, given its projection of a record $10.9-billion deficit.
The tax is scheduled to bring in more than $3 billion into the provincial treasury in 2025-26, according to the latest provincial budget.
“The carbon tax has turned into nothing but a cash cow,” said Opposition finance critic Peter Milobar.
The NDP contends (much like the BC Liberal government before it) that it returns more money in tax credits than it brings in as revenue from the carbon tax, effectively rendering it revenue-neutral.
Opposition leader John Rustad suggested Monday that the government will try to make up lost revenue on the consumer side by shifting to increase the output-based carbon tax on large industrial businesses.
“Getting rid of the consumer tax and cranking up the business tax is only going to make us less competitive,” said Rustad, who called it a “job-killing” proposal.
Eby did not deny he was considering the move. Bailey said government hasn’t made up its mind.
“The Conservatives are saying that’s what we’re going to be doing; we have not made that decision,” said Bailey. “And it’s really important to us, particularly at this moment in time, that our businesses are competitive. So we will take a look at the impacts of this.”
Eby had at one point promised to be the last defender of the carbon tax in the country, and accused federal Conservative Leader Pierre Poilievre of living “in a baloney factory” for opposing it. Prior to the campaign, he switched his tune to endorse Poilievre’s position.
On Monday, back in power after (barely) winning the October election, the premier sounded like he regretted making the promise.
“I think it's unfortunate that a policy that existed between governments for a long time in British Columbia, successful policy in driving down our carbon pollution, that had support ultimately on both sides of the legislature, was politicized and accelerated in the face of a cost of living crisis, in a way that cost public support across the political spectrum for it,” he said.
“I think that's really unfortunate. Because it was an important tool here in British Columbia. With that said, we made an unambiguous commitment to British Columbians that we will get rid of that carbon tax.”
There’s no way now for the premier to renege on that commitment. He could try to backstop the budget by sliding billions in new taxes to business, but his political opponents are watching for just such a move, and it would fly in the face of his promises to the business community to reduce costs and improve competitiveness to help kick-start economic growth during American tariffs.
The NDP might just have to eat the lost revenue from the carbon tax, or cut its climate relief programs. Unless the new prime minister somehow comes to the rescue.
Rob Shaw has spent more than 17 years covering B.C. politics, now reporting for CHEK News and writing for Glacier Media. He is the co-author of the national bestselling book A Matter of Confidence, host of the weekly podcast Political Capital, and a regular guest on CBC Radio.
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