All but two of B.C.’s 93 MLAs supported the elimination of the carbon tax, but it still took until 1:30 a.m. Tuesday to erase it from the books.
A lot of scores had to be settled, grudges refreshed and names called before the recrimination festival ended and the legislature dragged Lt.-Gov. Wendy Cocchia out of bed and made her wave her hand over the capitulation.
“I want to know where the after party is,” she joked on her way out the door.
Hours later, taxpayers woke up to a bright new day featuring a dramatic drop in gas prices — for a while. The other major impact will become apparent later on — the erosion of revenue projections in the one-month old NDP provincial budget.
That master plan arrived the same day the U.S. tariffs on Canada were supposed to hit. But the clown show that is the U.S. government was so chaotic by then that planning was impossible. So the budget blithely noted: “Given the evolving and fluid situation, (the catastrophic potential impact of tariffs) is not incorporated into the budget.”
Now another “fluid and evolving situation” — the massive about-face on B.C.’s major climate change strategy — has prompted the same attitude to the resulting revenue impact.
Cutting the tax will cost B.C. about $2 billion in lost revenue. It’s actually about $3 billion, minus the $1 billion that gets paid back to lower income earners through the tax credit. There is no recognition of that fact in the budget, other than a passing reference that the government was committed to removing the tax should the federal government eliminate the law on carbon pricing.
Although the Conservative Party of B.C. was obviously going to support the move, Opposition finance critic Peter Milobar led the night-long charge in pointing out all the problems arising from the NDP backflip on the tax. Many of which arise from the fact it has been on life support for months, but the government waited until the last possible day to make it official.
“Everything in the budget anticipates the carbon tax going up over the next three years … to close to $10 billion in revenue,” he said.
But all the ranking federal politicians were signalling the tax was coming to an end. “The only two politicians in the country that did not think there were substantive changes coming were the finance minister and the premier.”
Numerous past NDP quotes about the sanctity of the carbon tax were recounted, just to rub it in. A highlight was Premier David Eby’s declaration about the tax from 13 months ago: “B.C. will stand strong on climate even if we’re the only province… because we don’t see another choice. Anyone who tells you that there’s another choice is lying to you.”
Milobar probed for details about all the implications flowing from the elimination of the tax. There was an extra $200 added to the rural and northern homeowner grant that was funded by the carbon tax. Some film and digital media tax credits, clean building grants and small business credits are also linked to revenue from the former tax.
Finance Minister Brenda Bailey could only beg for time to sort it all out.
“There’s been 17 years of programs and legislation related to the tax. It’s going to take time for us to figure out which will move forward and which won’t… It’s unrealistic to make a request that I have information on all those decisions yet.”
Milobar said it was incredible that Eby made the bill a confidence vote “when the government can’t with any confidence tell us what is going to happen to $1.8 billion worth of programs if this vote goes through.”
The only two people who voted against the retreat as the bill rushed through were the Greens Jeremy Valeriote and Rob Botterell.
Botterell said the gas price drop will be temporary and any expectations it will solve the cost of living crisis are illusory.
The bigger concern is that the climate action tax credit for lower income earners — up to $1,000 per family — will disappear. It more than offsets the cost of the carbon tax for most recipients, making them net losers.
“It’s the people who have higher incomes with multiple cars and commutes who will benefit the most.”
Valeriote said the change fails the next generation and is a betrayal of responsibility.
Bailey said various spending reviews are underway to deal with the lost revenue. But given the NDP track record, it’s a safe bet they’ll just write the loss off on to the $11 billion annual deficit.
