British Columbia

Carbon tax review welcomed by B.C. farmers

The B.C. government's promise to review the controversial carbon tax is being applauded by the agricultural organizations.

The B.C. government's promise to review the controversial carbon tax is being applauded by the agricultural organizations.

Finance Minister Kevin Falcon confirmed during Tuesday’s provincial budget speech that the government will increase the carbon tax one more time as scheduled this year.

But after that the tax will then be frozen while the government conducts a review to determine its impact on B.C.'s economy, he said.

The B.C. government has announced a review of its controversial carbon tax. (CBC)

"This is a good time to pause and examine how the carbon tax is increasing our economic competitiveness both on the positive side and the negative side," Falcon said.

Falcon noted that B.C.'s added tax on fossil fuels is the only one of its kind in North America.

"We had always anticipated others would follow us down this path … That didn't happen."

The tax has hit the greenhouse industry particularly hard, Falcon noted, saying he may introduce some sort of short term relief for that industry before the end of the year. 

The return to the PST next year is also expected to hit B.C.'s agricultural industry hard as well, because producers will not get as many tax breaks on their input costs. 

The food production industry is just one sector of the B.C. economy that argues the tax increases its costs, making it difficult to compete with the U.S. and Mexico.

Apple farmer Joe Sardinha, of Summerland, said he welcomes the review.

"Whether it's propane, gas, diesel, natural gas ... certainly in agriculture we're users of it all," Sardinha told CBC News late Tuesday.

"In my sector, from the farm to the packing house, we use every one of those fuels."

Wrong direction

But not everyone is pleased with the prospect of the tax being permanently frozen or even eliminated.

Four years ago, environmental organizations applauded the government, saying the tax it was a politically bold initiative that made B.C. an environmental leader.

Now the province might be taking a step in the wrong direction, said David Suzuki Foundation’s spokesman Ian Bruce.

"One of the fastest growing sectors of the B.C. economy is the clean-energy sector. We have 200 companies that employ almost 10,000 people," said Bruce.

"What kind of signal does this send to investors that B.C.’s carbon tax is on hold, our efforts on climate change are on hold."

The gasoline carbon tax now totals 5.56 cents on every litre. It will rise another 1.11 cents to 6.67 cents per litre July 1.

The tax is also applied to diesel and all oil-based fuels, as well as natural gas and coal, and has jumped every July 1 since 2008.

It is forecast to generate $1.17 billion dollars in revenue for the government in the coming fiscal year.