Canceling the carbon tax would hurt low income families the most

Photo: Contributed

The McDougall Creek Wildfire burns on a ridgeline overlooking Kelowna in 2023. An increase in wildfire activity has been blamed by some on climate change.

There are two certainties that we face. One is that climate change is already upon us, showing up in weather records everywhere and the second is the people who have the most to lose from climate change are those with the lowest income, both worldwide and here in B.C.

When wildfires, floods and excessive heat hit, those people won’t have the insurance to rebuild, the income to relocate or access to air conditioning.

So I have had a sinking feeling in my gut since the B.C. NDP joined the B.C Conservative party in saying it would scrap the B.C. carbon tax. The tax has been one of the bright spots of Canadian climate policy. The tax has kept B.C. carbon emissions level during a time when the economy grew and the population increased.

Why do the B.C Conservatives and B.C NDP want to end the carbon tax? They feel with food inflation and housing prices rising, the tax is a burden on the poor and middle class in B.C. That claim is factually wrong.

The B.C. carbon tax was designed to prevent that very issue. Rebate checks from the carbon tax are issued four times a year to low income B.C. residents. People making less than $41,071, or families making less than $57,288 per year, are eligible for the full credit ($504 - $1,008 depending on the size of the household). Incomes higher than those limits get partial payments.

Ironically, a carbon tax comes from the conservative side of the spectrum. Governments all over the world are trying to set policies to slow climate change. Should they encourage renewable energy like the 2024 B.C. Hydro power call? Should they make low interest loans to finance home energy efficiency upgrades like the Canadian Greener Homes loan?

Conservatives the world over would tell you two things about government. First, it isn’t very good at picking winners. The ethanol produced from corn contributes more carbon emissions than fossil fuels. The millions of dollars spent on building hydrogen infrastructure has generated more carbon emissions because hydrogen is being made using fossil fuels.

(Not all policy interventions are useless. Felix Pretis, an economist at the University of Victoria, led an important study identifying 63 policies used worldwide that have had a significant impact on carbon emissions.)

The second fact conservatives (and many liberals) agree on is that even when government picks effective policies, it often implements them inefficiently. Government often spends a lot of money for very little carbon reduction.

A carbon tax, by contrast, sidesteps both those issues. With a carbon tax, the government doesn’t pick winners and losers. Our hard-earned tax money isn’t spent on inefficient programs that cost a lot of money and don’t save a lot of carbon. You choose how to spend your money.

Economists world wide and from both sides of the political spectrum agree the most effective and most efficient way to reduce carbon emissions is to use a carbon tax.

Why does the tax work? Everyone, from the very wealthy to the very poor are educated consumers. We know which brands to buy, where to make purchases and the location of the cheapest gas station. By slowly including the climate-cost of fossil fuel products, people make different choices, ones that are better for the planet. That doesn’t just apply to consumers, businesses of all scales and industries respond to price pressure.

B.C.’s carbon tax isn’t perfect. For one thing, rather than covering100% of carbon emissions in B.C., it covers only about 70%. Currently the following are exempt from the carbon tax

• Non-fuel emissions from agriculture and landfills, about 15% of BC carbon emissions.

• Emissions from extracting and processing fossil fuels, such as leakage of methane from natural gas pipelines.

• 3. Carbon dioxide released from cement producers during the production of lime. Since 2023 B.C.’s greenhouses, which use natural gas and propane to heat poorly insulated buildings, have had an exemption from the carbon tax.

Another issue with the carbon tax is B.C. has set carbon targets which would limit global warming to 2 C, avoiding the worst effects of global warming. But B.C.’s scheduled carbon tax increases are too slow to accomplish the goal.

It is amazingly shortsighted to cancel B.C.’s carbon tax on behalf of low and middle income residents. The carbon tax, as it exists in B.C., already rebates 100% of taxes paid to low-income British Columbians. As the climate crisis gets worse, something the B.C. carbon tax is trying to address, the people with the lowest incomes will suffer the most from global warming.

Around the world, that means people already on the edge will die of famines and extreme weather. In B.C. it means people without a financial cushion and without adequate insurance will lose homes to atmospheric rivers (2021), wildfires (annually but especially 2023) and in the Okanagan, flooding from sudden spring snowmelt (2017, 2018).

Wealthy Canadians can re-landscape, rebuild and, if all else fails, relocate. Low income Canadians don’t have that option.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.