Vancouverites line up to fill their gas tanks Monday afternoon before the provincial carbon tax takes effect on Canada Day. (CBC) British Columbians will pay more at the gas pump as the provincial government's carbon tax on all fossil fuels takes effect Tuesday.
The carbon tax, introduced in the Feb. 19 budget, taxes carbon-based fuels — including gasoline, diesel, natural gas and home heating fuel — at a rate of $10 per tonne of greenhouse gases generated. The carbon tax will rise $5 a tonne for the next four years until it hits $30 per tonne in 2012.
The Tuesday tax increase works out to an extra 2.4 cents a litre on gasoline, increasing to 7.24 cents per litre by 2012.
The government has said all carbon tax revenue — about $1.8 billion over three years — will be returned to British Columbians through reductions to income and business taxes.
'The last time Canadians were sold on a revenue-neutral tax, it was called the GST.' — Maureen Bader, B.C. director of the Canadian Taxpayers Federation
To soften the impact of the carbon tax, the government gave a $100 climate action dividend to each British Columbian at the end of June.
Maureen Bader, the B.C. director of the Canadian Taxpayers Federation, said consumers will likely end up paying more as businesses raise prices and municipalities increase property taxes.
"The last time Canadians were sold on a revenue-neutral tax, it was called the GST," Bader said.
Ian Bruce, a climate-change specialist with the David Suzuki Foundation, said he believes the carbon tax will work by prompting the energy industry to look for ways to save money.
"We'll start to see more things like wind power [and] more solar power for home heating, these solutions we haven't seen in Canada because we haven't had a carbon tax."
Ashley Dwan, who has received her cheque, said while filling up at a gas station in Vancouver that the one-time dividend doesn't seem enough to offset the fossil fuel price hike.
"I thought that extra $100 we're getting back from the government was going to be fantastic, but really, now it's just going to go back into paying for my gas to get to work because I drive an hour," Dwan told CBC News Monday.
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