B.C. government freezes carbon tax until 2018 to allow other Canadian jurisdictions to “catch up”

The government of British Columbia announced on Friday that it has frozen its current $30 per tonne carbon tax until 2018 to allow other jurisdictions in Canada to catch up to the province.

The response is related to the province’s Climate Leadership Team (CLT), which recommended that B.C. build on the success of the carbon tax by establishing a “new, innovative fiscal policy that helps mitigate impacts on emission-intensive, trade-exposed sectors while putting a higher price on pollution,” the Ministry of Environment said in a press release. The ministry added that it would only consider an increase in the tax under a regime where emission-intensive, trade-exposed industries are fully protected from any carbon tax increase.

The recommendation was one of 32 developed by the CLT for consideration by the provincial government to move B.C.’s climate agenda forward to achieve 2050 targets, the release said. The recommendations largely address two areas: carbon pricing and taking actions to reduce emissions.

In January 2016, British Columbia will begin consultations with industry and the public to consider new fiscal policies that would “maintain the principle of revenue-neutrality, ensure the affordability of British Columbia families, fully protect our emission-intensive, trade-exposed sectors and maintain the competitiveness of B.C. businesses,” the environment ministry said in the release.

Regarding actions to reduce emissions, the CLT recommended a 2030 target to reduce emissions across three broad sectors: Built Environment, Industry and Transportation by 40% compared to 2007. “The province commits to a detailed review and analysis of the CLT’s recommendations as well as other actions to develop a robust plan to establish and achieve emissions reductions across the three broad sectors identified by the team,” the government responded.

Other recommendations included:

• Expand coverage of the current carbon tax to apply to all greenhouse gas emission (GHG) sources in B.C. after five years, starting with measurable GHG emissions covered by the current reporting regulation;

• Establish a strategy (including funding) to phase out, by 2025, diesel generation in remote communities and replace it with reliable, low-GHG electricity service;

• Create a task force with appropriate expertise to review and update carbon management best practices for the agricultural sector; and

• Develop a low-carbon transportation strategy for transitioning the transportation sector to emit 30% fewer GHGs by 2030.

Earlier this year, the CLT, consisting of leaders from the business, academic and environmental communities, as well as First Nations and local governments, was appointed by Premier Christy Clark to review options for economic development and GHG emissions reductions, and also make recommendations for government’s new Climate Leadership Plan.