Balanced Budget 2008 includes more than $1 billion to support the government’s greenhouse gas emission reduction target. This includes new spending on public transit, greener ports, energy efficient buildings, a carbon neutral public sector and increased incentives to get older, less efficient vehicles off our roads. It also includes new sales tax exemptions for fuel-efficient vehicles and ENERGY STAR appliances, along with $60 million for home energy audits and conservation incentives.
BC’s Revenue-Neutral Carbon Tax
We’re introducing North America’s first comprehensive carbon tax to encourage individuals and businesses to reduce their use of fossil fuels and related greenhouse gas emissions.
It’s revenue-neutral because, by law, all revenue raised by the carbon tax must be returned to individuals and businesses through reductions to other taxes.
The carbon tax provides an incentive without favouring one way to reduce emissions over another. Businesses and individuals can choose to avoid it through conservation, increasing efficiency, changing fuels, adopting new technology and any combination of these approaches.
A higher price for higher-carbon choices also makes greener options more commercially viable, encouraging innovative solutions that offer consumers and business affordable, lower or no-carbon emission alternatives.
Effective July 1, 2008, the carbon tax will apply to virtually all fossil fuels, including gasoline, diesel, natural gas, coal, propane and home heating fuel, making it among the most comprehensive in the world. It will be introduced in phases to allow individuals, businesses and industry time to adapt, innovate, and reduce the impact of the tax.
The carbon tax starts at a rate based on $10 per tonne of associated carbon, or carbon-equivalent, emissions and will rise by $5 a year for the next four years – reaching $30 per tonne by 2012. This works out to 2.41 cents per litre for gasoline, rising gradually to 7.24 cents a litre by 2012. For diesel and home heating oil, it works out to 2.76 cents per litre, rising to 8.27 cents over the same five-year period.