British Columbia

B.C. delays carbon tax increase to help with COVID-19 recovery

The B.C. government is hitting pause on a scheduled increase in the carbon tax, as residents and businesses continue to struggle financially because of the COVID-19 pandemic.

Clean energy think tank Pembina Institute says decision 'sends the wrong signal'

B.C.'s carbon tax rate was originally scheduled to rise to $45 per tonne of carbon dioxide equivalent in April 2020. (Andreas Rentz/Getty Images)

The B.C. government is hitting pause on a scheduled increase in the carbon tax, as residents and businesses continue to struggle financially because of the COVID-19 pandemic.

The province announced Wednesday that it has officially pushed back the next jump in price to April 2021, a full year after the change was supposed to happen. Until then, the carbon tax rate will remain at $40 per tonne of carbon dioxide equivalent (tCO2e.)

"This change will give businesses and families more time to recover from the COVID-19 pandemic, while still meeting the required federal carbon-pricing backstop rate of $50 per tCO2e by 2022," the finance ministry said in a press release.

The increase to $45 per tCO2e was originally scheduled to happen in April of this year, but it had been put on hold until at least October as the province tried to deal with the fallout caused by the novel coronavirus.

The continued delay has already attracted criticism from the Pembina Institute, a clean-energy think tank.

"We are concerned that the government's deferral of the next rate increase sends the wrong signal to investors and businesses that are leading the way to B.C.'s low-carbon economy. Now is not the time to slow B.C.'s momentum," the institute's national policy director, Josha MacNab, said in a press release.

The B.C. Green Party has also responded, charging that holding off on the increase will deprive the province of revenue at a time when it's most needed.

"This approach misses the mark and weakens the signal that we can build back better," MLA Sonia Furstenau said in a release.

"Instead of weakening the carbon tax for heavy emitting sectors, we should be leaning into the opportunity it provides to reinvest in economic recovery."

Meanwhile, B.C. is also delaying the implementation of two other changes to provincial taxes until next April, including the elimination of PST exemptions for sweetened carbonated beverages and new PST requirements for e-commerce businesses located outside B.C.

Quarterly instalment dates for the employer health tax have also been extended.

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