A leading Canadian economist says changes to the provincial climate action tax credit can make a difference.
Under the changes, British Columbians can receive as much as $447 per year, which marks an increase of $250 from 2022 — or more than double.
Jim Stanford, economist and director of the Centre for Future Work, and a research associate with the Centre for Policy Alternatives, warned against dismissing that figure.
“How much $447 over a year? It’s not nothing for low-income people. It’s a significant amount.”
The credit is a quarterly payment designed to offset the carbon tax paid by individuals and families. Finance Minister Katrine Conroy announced its expansion effective July 1 as part of the 2023 provincial budget in February, and she used the start of payments going out to British Columbians to tout it again.
“Boosting the climate action tax credit is just one of the ways we are putting money in people’s pockets as we work toward a low-carbon future,” she said.
The expansion means that individuals with a net income below $61,465 will receive a full or partial credit while single parents with two children with a net income below $89,270 will receive a full or partial credit. According to finance ministry, more than two million individuals and families will see the first quarterly payment of the credit in their bank accounts this week and 70 per cent of eligible individuals can expect the maximum amounts.
The expansion of the credit will continue through the decade with the goal of reaching 80 per cent of all households.
The expansion coincides with increases in the carbon tax. It currently sits at $65-per-tonne following an increase of $15-per-tonne on April 1, and it will reach $170 in 2030. The increase means that the tax’s share on a litre of gasoline will rise to 37.4 cents by 2030 from just over 14 cents today.
Government has promised that a significant number of British Columbia will receive more money back through the credit than what they pay in higher carbon tax. But that has not stopped criticism.
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Carson Binda, B.C. Director for the Canadian Taxpayers Federation, in March called on the provincial government to cancel the increase scheduled for April 1, citing among other reasons, inflationary pressures.
“Life is unaffordable for British Columbians right now,” she said. “This tax hike will only make it harder for families to afford to buy groceries and to get to work.”
Other voices representing rural British Columbia, the right side of political spectrum, or both, have since echoed this call. The Conservative Party of B.C. promising to cancel the tax completely.
Stanford said government did not design the credit to counter inflation and it is not fair to expect it to do that.
Instead of raising revenue, Stanford said the carbon tax instead tries to change the energy choices of consumers toward energy conservation and renewables by making fossil fuels more expensive, he said.
“It shifts the decision-making of people to encourage them to use less polluting energy,” he said. “If you adjust your decision-making to reduce energy use or to shift to renewables, you’ll get back more than you paid in the carbon tax and that’s the sort of behaviour that this whole idea is designed to promote.”
So how much a difference does it make?
“So any given increment in the carbon tax doesn’t change the world overnight,” Stanford said. “But it certainly does impact people’s decisions. The fact that B.C. has had a carbon tax longer than any other province means there’s has been more time to infiltrate these consumer choices and it’s one of the reasons, not the only reasons, but one of the reasons that B.C. has one of the best records of any province on carbon emissions.”
@wolfgangdepner
wolfgang.depner@blackpress.ca
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