BC's carbon tax has not lost its mojo

An opinion piece in the Report on Business section of today's Globe and Mail suggests that British Columbia's widely-lauded carbon tax system has betrayed its early promise (and its early promises).

Now, first, bear in mind that the opinion belongs to Peter Shawn Taylor, a journalist with Macleans and the National Post and a regular contributor to Canadians for Affordable Energy (a borderline climate change denial organization, whose main contention is that "Reductions in carbon dioxide emissions should not be pursued at the expense of jobs or household energy budgets").

Anyway, Taylor argues that BC's carbon tax - which was first instituted by the provincial Liberal government back in 2008 and has been praised around the world as a "textbook policy" for greenhouse gas reduction - has reneged on its promise of revenue neutrality, and has turned into a good old-fashioned "tax grab". The Liberals originally promised that: "Every dollar raises will be returned to the people of BC in the form of lower taxes", and in the early years that is certainly exactly what happened: the carbon tax was re-distributed in its entirety in compensatory cuts to income and corporate taxes.

As the years went by, though, Taylor argues, the carbon tax started to be "returned" in less direct ways. Taylor singles out film tax credits and tax breaks for interactive digital media, although these almost certainly represent tiny fractions of the overall tax redistribution. Now, he says, the new NDP government in BC has dropped all pretense of revenue neutrality, and plans to use the carbon tax income (or "windfall" as Taylor insists on pejoratively characterizing it) to "create jobs, benefit communities and reduce climate pollution".

Now, this all sounds reasonable enough to me - that is what the government is for, and what they were voted in to do, and taxes are the way they earn the wherewithal to achieve it - but Mr. Taylor sees this as an unconscionable break of a sacred vow or contract.

It seems to me that the NDP government intend to create jobs, benefit communities and reduce climate pollution come what may (as they were mandated to do), and if carbon tax revenue were to be given back as income tax relief, then the money would have to be raised through other means (i.e. other taxes). So what, then, would be the net difference?

Mr. Taylor's piece is, at heart, a bit of politically-motivated grandstanding, masquerading as socially-responsible sleuthing. Don't drink the Kool-Aid.