Canada

Liberals to release carbon tax plan details Thursday: sources

Details of the Liberals' highly anticipated plan for a carbon tax will be released on Thursday and will be similar to measures recently introduced in British Columbia, CBC News has learned.

Details of the Liberals' highly anticipated plan for a carbon tax will be released on Thursday and will be similar to measures recently introduced in British Columbia, CBC News has learned.

The purpose of Liberal Leader Stéphane Dion's plan is to put a price on emissions from fossil fuels as a way to get people and companies to reduce their energy use.

Sources told CBC News that the Liberal plan will have a sliding tax scale that will increase over four years.

According to the sources, the plan will start with a cost of $10 a tonne on fossil fuels such as oil, gas and coal, and ramp up to $40 a tonne at the end of four years, the CBC's Margo McDiarmid reported.

But the plan will not apply to fuel used for transportation such as cars, trucks or buses, as there is already a substantial federal tax on that fuel.

At its top rate, the plan could add 10 cents to the cost of a litre of fuel, which could add approximately 10 per cent to the cost of heating the average home in Canada.   

The carbon tax will be applied to all fuel for home heating, for industry and for the production of electricity. The tax is designed to be revenue neutral, so individuals and companies will get tax breaks to balance off the higher costs of goods and heating.

The sources said there will also be tax credits that will provide refunds to help low-income Canadians who don't pay income tax.

The Conservatives have targetted Dion's plan even before it has been released, calling it a "liberal tax grab" and launching an advertising campaign ridiculing it earlier this month. Prime Minister Stephen Harper has dismissed the plan as a "foolish and unnecessary policy."

Dion has only said the plan would involve shifting taxes toward things Canadians want less of: pollution, greenhouse gas emissions, smog and waste.

He also said he will ask the auditor general to compile an annual report on the carbon tax to ensure it is revenue neutral.

With files from Margo McDiarmid

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