BACKGROUNDER
2009FIN0004-000191 Feb. 17, 2009	Ministry of Finance and Ministry responsible for the Olympics
B.C.’S REVENUE NEUTRAL CARBON TAX

On July 1, 2008, British Columbia implemented North America’s first revenue neutral carbon tax. B.C.’s carbon tax puts a price on pollution to encourage individuals, families and business to make more environmentally responsible choices. 

 

All revenue collected from the carbon tax is returned to British Columbians through tax reductions. The Revenue Neutral Carbon Tax Plan 2009/10 to 2011/12 estimates revenues from the carbon tax at $2.27 billion over three years. Tax reductions are estimated at $2.5 billion – $1.25 billion in tax cuts for individuals and $1.25 billion in tax cuts for business.

                                                                                             

As part of this Plan, Budget 2009 introduces the following new measures:

·        Increase the low income climate action tax credit by 10 per cent to $115.50 per adult and $34.50 per child, effective July 1, 2011;

·        Provide a Northern and Rural Homeowner benefit of up to $200 beginning in 2011;

·        Increase the Industrial Property Tax Credit to 60 per cent from 50 per cent beginning in 2011; and

·        Reduce school property taxes for farm land by 50 per cent beginning in 2011.

 

For 2008/09, carbon tax revenues are estimated at $300 million. With the revenue neutral tax measures introduced with Budget 2008 and the new and accelerated tax cuts from the October 2008 Economic Plan, individuals and business will receive a total of $494 million in tax reductions – or $194 million more than the revenue collected from the carbon tax.

 

B.C.’s carbon tax provides built-in protection for lower-income British Columbians through the low income climate action tax credit. As outlined in Budget 2008, effective July 1, 2009, the annual credit is increased to $105 for adults and $31.50 for children.

 

The carbon tax will increase to $15 per tonne of associated carbon dioxide equivalent emissions, effective July 1, 2009. This will increase the taxes on a litre of gasoline by 1.17 cents and by 1.35 cents on a litre of diesel and home heating oil. Each year, the carbon tax will increase by $5 per tonne, until it reaches $30 per tonne in 2012.

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For the finance minister’s speech and more details on Budget 2009, visit www.bcbudget.ca

Media contact:	Ministry of Finance Communications 250 387-5013
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