News flash for Kevin Falcon: no one believes you when you say your carbon tax is going to be revenue neutral.
Tapped out B.C. taxpayers need the carbon taxes to be gone, not tinkered with.
And they remember it was the B.C. Liberals that first imposed carbon taxes in Canada and quickly undermined any semblance of revenue neutrality.
Back in 2008, then-premier Gordon Campbell introduced a carbon tax which he pledged would be “revenue neutral.” The government imposed a carbon tax of $10 per tonne, or about 2.4 cents per litre of gasoline. At that same time, the government passed a corresponding income tax cut, making the costs of the carbon tax balance out on paper.
But that didn’t last.
Instead of being honest about the failure of the revenue neutral carbon tax, the Christy Clark government doubled down on a failed policy. Back then, the government started counting pre-existing tax cuts as offsets for the cost of the carbon tax.
By fiscal year 2013-14, it was already taking more money from B.C. taxpayers than it was giving back.
Now the David Eby NDP government has abandoned claims of revenue neutrality all together.
This year, the carbon tax will cost taxpayers $2.8 billion, with carbon tax rebates only returning an estimated $412 million to taxpayers through the Climate Action Tax Credit. The rebate system in B.C. starts shrinking the cheques when combined family income reaches $43,051. By the time the family makes $79,400 in combined income, the rebates disappear completely.
It’s not just B.C.’s claims of revenue neutrality that turned out to be all smoke and mirrors.
It’s bad on the federal stage, too.
Prime Minister Justin Trudeau claims that “families are going to be better off” because of the federal carbon tax. Trudeau is saying, just like Falcon, that his carbon tax is revenue neutral, or even gives more to Canadians than they lose.
Just like in B.C., the federal carbon tax’s revenue neutrality turned out to be as mythical as Ogopogo.
As the Parliamentary Budget Officer pointed out, the first federal carbon tax will cost the average Canadian family up to $720 this year, even after the government rebates. The PBO went a step further in a follow-up report and said carbon taxes are “broadly regressive” because “the cost to lower income households represents a larger share of their income.”
You don’t leave families better off by charging them more to heat their homes or fill up their cars, running money through the bureaucracy and sending back the leftover change with rebate cheques.
It’s a hard sell when door knocking and asking for votes.
Recent votes show politicians do well when they campaign against carbon taxes.
Pierre Poilivere broke the record for signing up new members during his leadership race and one of his key promises was to scrap the federal carbon taxes.
Less than a month ago, Alberta Premier Danielle Smith won a majority government with a pledge to “fight the carbon tax.”
Scott Moe in Saskatchewan, Doug Ford in Ontario and Tim Huston in Nova Scotia have won overwhelming mandates by voicing opposition to carbon taxes.
All of this adds up to a problem for Falcon. Intuitively, it’s hard for taxpayers to believe the government will charge a tax and give the money back. But British Columbians aren’t relying on intuition; they know from experience that a revenue-neutral carbon tax is a myth. Falcon needs to stop pedalling revenue-neutral carbon tax nonsense if he wants to have any credibility with taxpayers.
Carson Binda is B.C. director for the Canadian Taxpayers Federation.