Comment on BC Budget

Budget 2008 Meets Key Tests on Climate Commitments
BC's major environmental groups, 19-Feb-2008

BC introduces carbon tax
Dirk Meissner, Canadian Press, 19-Feb-2008

BC government carbon tax, cash incentives geared at greening up the public
Canadian Press, 19-Feb-2008

B.C. introduces carbon tax
Jonathan Fowlie and Fiona Anderson, Vancouver Sun, 19-Feb-2008

B.C. budget hikes fuel costs with new carbon tax
CBC News, 19-Feb-2008

B.C. pledges Greenbucks in bid to sell first carbon tax
Nathan VanderKlippe, Financial Post, 19-Feb-2008

Mining Industry Supports BC Budget
The Mining Association of British Columbia, 19-Feb-2008

Campbell's carbon tax not revenue neutral for working, low income people
B.C. Government and Service Employees Union, 19-Feb-2008

B.C. budget includes a number of smaller tax changes too
Chad Skelton, Vancouver Sun, 19-Feb-2008

Spending surpasses revenue in 'balanced' budget
Harvey Enchin, Vancouver Sun, 19-Feb-2008

BC's 2008 Budget

February 19, 2008, Victoria, BC - Major BC environmental groups today welcomed the 2008 budget that will put BC firmly on the path to achieve bold commitments set out in the 2007 Throne Speech. Of the key areas in which environmentalists were looking for clear action (see below), three were given strong grades. The remaining climate-related area--cross-budget consistency-- remains a concern, with ongoing subsidies to the carbon-emitting oil and gas sector and massive capital investments in new highways. Also of concern is the lack of new funds for biodiversity preservation and management.

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BC Sustainable Energy Association - Tom Hackney (250-744-2720)
Better Environmentally Sound Transportation - Kris Etches
Canadian Parks and Wilderness Society - Chloe O'Loughlin (604-512-0428)
Dogwood Initiative - Will Horter (604-418-1672)
Georgia Strait Alliance - Christianne Wilhelmson (604-862-7579)
Living Oceans Society - Oonagh O'Connor (250-230-6580)
Pembina Institute - Matt Horne (778-235-1476)
Sierra Club BC - Lisa Matthaus (250-888-6267)
West Coast Environmental Law - Greg Gowe (604-220-2520)
Wilderness Committee - Andrea Reimer (604-719-3920)

B.C. Finance Minister Carole Taylor, standing, smiles
as she delivers her final budget in the legislature
Tuesday February 19, 2008 in Victoria, B.C. Taylor
is applauded by B.C. Premier Gordon Campbell
right and Deputy Premier Shirley Bond left.
THE CANADIAN

VICTORIA - Finance Minister Carole Taylor introduced an escalating carbon tax on most fossil fuels Tuesday, one she says is designed to ignite an environmental social movement in British Columbia and across Canada to fight climate change.

And she's handing every British Columbian $100 in June as seed money to get them thinking green.

"This is an important turning point for British Columbia," she said. "We think for Canada."

The carbon tax , effective July 1, will be phased in over five years to give consumers and businesses time to adjust to the new tax and understand there is a cost associated with generating harmful greenhouse gases, she said.

The carbon tax will start at a rate based on $10 per tonne of carbon emissions and rise $5 a year to $30 per tonne by 2012, Taylor said. The tax works out to an extra 2.4 cents on a litre of gasoline, rising to 7.24 cents per litre of gasoline by 2012.

Taylor said the carbon tax on diesel and home heating oil will start at 2.7 cents per litre and increase to 8.2 cents per litre over the same five-year period.

British Columbians already pay a 3.5-cent-per-litre gasoline tax to help fund transportation projects.

"We're not just going to be talking about climate change," said Taylor. "We are acting. This could be a social movement in British Columbia."

Taylor said the carbon tax will be revenue neutral, meaning the government will not use money generated from the tax to fill its coffers. The carbon tax revenue, estimated to hit $1.8 billion over three years, will be returned to taxpayers through personal income tax and business tax cuts, she said.

The government will introduce legislation that requires it to table an annual plan that shows how the carbon tax revenue will be returned to taxpayers, Taylor said.

To coax British Columbians to start thinking green, the government will send every resident a one-time $100 Climate Action Dividend in June. Taylor said the province hopes British Columbians will use the $100 to help adopt greener lifestyles.

Lower income British Columbians will receive an annual Climate Action Credit of $100 per adult and $30 per child to offset the cost of the carbon tax, she said.

Taylor said the carbon tax is one of the government's key building blocks to help it reach its legislated goal of reducing British Columbia's greenhouse gas emissions by 33 per cent by 2020.

"We have to find a way that we can work towards improving our environment and at the very same time do it in a way that keeps our economy strong," she said. "One piece of the puzzle, not the whole story, is a carbon tax."

Quebec has already introduced a form of a carbon tax, but the revenues return to government green technology initiatives, not taxpayers.

She said she believes British Columbia is already at the forefront of an environmental movement in Canada.

Taylor said British Columbia led Canada into the healthy lifestyles movement decades ago by choosing aerobics and granola over the beer fridge and living room couch, and the province now is ready to cut greenhouse gas emissions by driving less and walking more.

She said the budget attempts to balance the needs of fighting climate change while continuing to nurture a healthy economy.

"It is a budget that confronts and completely overturns the outdated notion that you have to choose either a healthy environment or a strong economy," Taylor said. "That either-or-thinking belongs to the past."

She said the B.C. government has decided to tackle the climate change issue despite concerns from Ottawa about patchwork green solutions that include carbon taxes and cap-and-trade emissions deals like the one British Columbia and other provinces are exploring.

"We had made the decision not to wait for a consensus," Taylor said.

The budget forecasts a $50 million surplus and annual growth of 2.4 per cent.

Taylor said the downturn in the U.S. economy will hurt the province's export and manufacturing industries, especially the forest industry, but the provincial economy should remain strong due to strong trading relationships with Asia and robust provincial job growth.

The tax incentives aimed at keeping the carbon tax "revenue neutral" will be dispersed as follows: the bottom two personal income tax rates will be cut by two per cent in 2008 and five per cent in 2009 on the first $70,000 in earnings; effective July 1, the corporate tax rate will drop to 11 per cent from 12 per cent; effective July 1, the small-business tax rate will be cut from 4.5 per cent to 3.5 per cent.

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VICTORIA - Highlights of the British Columbia budget presented Tuesday:

Carbon Tax:

-Beginning July 1, 2008, British Columbia will begin phasing in a carbon tax on all fossil fuels including gasoline, diesel, natural gas, coal, propane and home heating fuel.

-The rate starts at $10 per tonne of carbon-equivalent emissions and will rise by $5 per year for the next four years.

-As of July 1, there will be a 2.41-cent increase per litre in gasoline. By 2012, it will be 7.24 cents per litre.

-For diesel and home heating oil, it works out to 2.2 cents per litre, rising to 8.27 cents by 2012.

-The tax will generate about $1.85 billion over three years.

-Two thirds of the money raised in the first year will come from business.

-The tax is to be revenue neutral and none of the money raised through the carbon tax will go toward program spending.

-Legislation will require a plan to be tabled in the legislature each year showing how the carbon-tax revenue will be returned to businesses and individuals.

Tax cuts:

-Each adult and child in British Columbia will get a $100 rebate - a so-called Climate Action Dividend - in June aimed at helping people adopt greener lifestyles.

-Lower-income British Columbians will be eligible for a $100 payment per adult and a $30 payment per child as part of a Climate Action Credit. The money will be paid quarterly.

-The bottom two personal income tax rates will be reduced for all British Columbians, resulting in a tax cut of two per cent in 2008 and 5 per cent in 2009 on the first $70,000 in earnings.

-Effective July 1, 2008, the general corporate income tax rate will be reduced to 11 per cent from 12 per cent. By 2011, it will be reduced to 10 per cent.

-Effective July 1, 2008, the small business tax rate will be reduced to 3.5 per cent from 4.5 per cent, with further reductions planned to 2.5 per cent by 2011.

Spending:

-Health spending increases by $2.9 billion over three years.

-$144 million over three years in extra money will go to K-12 education.

-$104 million of extra funding will go to reduce homelessness over four years.

-An additional $78 million over four years to allow emergency shelters to stay open 24 hours a day.

Overall:

-Total government revenue is forecast at $38.5 billion in 2008-2009

-Total government expense is forecast at $37.7 billion in 2008-2009

-The budget includes a $375 million contingency fund for emergencies and a $750 forecast allowance.

-The surplus is projected to be $50 million.

-The surplus for the last budget year was $2 billion.

VICTORIA - Here are some things people are saying about the B.C. Liberal government's latest budget:

"This is an important turning point for British Columbia. We think for Canada." - Finance Minister Carole Taylor on introducing what her officials say is the most unique carbon tax in Canada.

"Corporate income tax reductions will make up approximately 23 per cent of the overall climate plan tax reductions, yet industry will pay approximately 60 to 70 per cent of the new carbon taxes. From the point of view of industry, more work needs to be done to ensure true revenue neutrality for all sectors." - Byng Giraud, vice president, Mining Association of British Columbia.

"We congratulate British Columbia on taking this visionary step. This marks a real turning point for British Columbia and puts the province at the forefront of North American action on climate change." - Ian Bruce, a climate change specialist with the David Suzuki Foundation.

"They have their priorities upside down again. It's not all nice, lovey-dovey stuff like she makes it out to be. It's a cheap election trick. It looks phoney." - BC Federation of Labour president Jim Sinclair on the government's plan to give every British Columbian a $100 cheque.

"We hope this budget will not increase the cost of business for retailers, which has been steadily rising over the past few years due to increases in occupancy, freight and staffing costs. This budget creates the potential for further increases in the cost of goods and transporting goods to retailers." - Mark Startup, president and CEO of Retail BC.

"The budget fails to deliver either adequate resources or any details on how government will tackle the real sustainability crisis facing health care - a crippling shortage of skilled health-care workers." - Health Employees Union.

"These cuts in school tax will assist B.C.'s major industries and largest employers adjust to challenging economic times, while the elimination of the capital tax will go a long way towards ensuring B.C. will be well placed to become the financial gateway to Asian markets." - B.C. Chamber of Commerce.

"The focus on climate change will leave B.C. with a legacy of debt." - Maureen Bader, B.C. director of the Canadian Taxpayers Federation.

VICTORIA - From cleaner fuels to greener washing machines, the British Columbia government is asking individuals to take on climate change.

The Liberal government's 2008 budget includes funding for home energy improvements and tax breaks on energy-efficient appliances.

Car buyers will get up to a $2,000 reduction in sales tax for the purchase of fuel-efficient vehicles and residents will even get a little green from the government to get them started.

In June, the government will send out $100 "Climate Action Dividends" to every man, woman and child in the province "to help people adopt greener lifestyles."

In addition to across-the-board cuts in personal income taxes - two per cent this year and five per cent next year on income up to $70,000 - low-income British Columbians will get a climate action tax credit of $100 a year per adult and $30 per child, to be paid quarterly with the GST tax credit.

But the cash incentives will be offset by the province's carbon tax, the first in Canada to apply to consumers.

The carbon tax will increase the cost of gasoline by 2.41 cents per litre and natural gas by 49.88 cents per gigajoule as of July 1. By 2012, the cost of gasoline will rise by 7.24 cents a litre.

The cost of the tax to individual British Columbians will depend on the choices they make, said Finance Minister Carol Taylor.

Those who choose to make changes and reduce their "carbon footprint" can save more than enough in household expenses to offset the carbon tax, she said.

"We do believe that people will have more dollars in the pocket despite this tax," said Taylor.

"They will have extra dollars in their pocket to help them make the transition if they choose to do so."

That's true of the first year of five-year plan. It may even be true for the second year, say critics.

But by the time the carbon tax climbs to $30 per tonne in 2012, the annual increase for a family that logs 40,000 on the road a year in a vehicle that burns 15 litres per 100 kilometres will be $496.80 a year. The cost of home fuel for a standard efficiency gas heater for the home will increase $105 a year.

A double-income family of four earning $60,000 a year will see a $45 reduction in income tax this year and $118 next year.

If they drive a vehicle that gets 10 kilometres a litre for 20,000 kilometres a year, gas will cost $24 more this year and $60 next year. The cost of natural gas heat and hot water will increase $21 this year and $53 next year, according to government estimates.

A senior couple earning $30,000 a year, driving 7,000 kilometres a year in a vehicle that gets about eight kilometres a litre will pay $10 more for fuel this year and $25 next. Home heating costs will increase about $30 this year and $70 next.

The government took the unusual step of making recommendations for some of the changes individual British Columbians can make to save money and the Earth.

Driving one day less per week can save $233 a year once the tax kicks in, according to government estimates. Taking public transit can save $185, walking to work $197 and weatherizing windows and doors can shave off $44 a year.

That's not to mention the savings on insurance costs, parking or the federal income tax credit for transit, according to budget documents.

Taylor said the gradual implementation of the carbon tax is meant to give people time to adjust.

"Nobody expects that immediately we're all going to go out and buy different cars or renovate our houses completely. But it gives us time to think about doing those things so that the next time a purchase comes up, we might change our behaviour along the way," she said.

Taylor said she'll use her $100 dividend to buy a new pair of running shoes. The B.C. finance minister said she has started walking to work and has worn out her shoes.

VICTORIA -- Driving and other fuel-dependent activities are about to get more expensive as British Columbia becomes the first jurisdiction in North America to introduce a consumer-based carbon tax.

However, Finance Minister Carole Taylor vowed Tuesday that all money collected through the new tax will be returned through a package of tax cuts and credits.

"We have to find a way that we can work towards improving our environment, but at the same time do it in a way that keeps our economy strong," said Taylor, as she presented a budget that, aside from the carbon tax, commits $1 billion over four years to fight climate change.

The $37.7 billion provincial budget also promises an additional $2.9 billion over three years for health care spending. That brings the total health budget to $13.8 billion for the coming year.

Taylor said the new carbon tax will begin July 1, starting at a rate that will have drivers paying about an extra 2.4 cents per litre of gasoline at the pumps.

If you drive a Prius hybrid, the government estimates the new tax will cost you about $20 extra per year. If you have a Dodge Ram pickup truck, that number will be closer to $68 it says.

The tax -- which will apply to virtually all fossil fuels, including gasoline, diesel, natural gas, coal, propane and home heating fuel -- will then increase each year after that until 2012, reaching a final price of about 7.2 cents per litre at the pumps.

After that, Taylor said, it will rest with the government of the day to decide if the tax rate should change any further.

"We've promised you green and today we've delivered green," said Taylor, dressed in green Fluevogs and a green suit for the occasion.

"This is an important turning point for British Columbia and we think for Canada," she added, likening the climate-change budget measures as a "social movement."

To help people adjust to the cost of the tax -- which promises to achieve about 7.5 per cent of the government's legislated reductions by 2020 -- all British Columbians will receive a one-time $100 cheque this June.

"We want to bring in the benefits first," said Taylor.

Corporate and personal income tax rates will drop to help make the tax revenue neutral, and lower-income British Columbians will receive an annual climate action credit of $100 per adult and $30 per child.

Overall, the government estimates the carbon tax will bring in revenues of about $1.85 billion over the first three years -- all of which it says will be returned to businesses and individuals.

Estimates suggest businesses will pay two thirds of the carbon tax, and will receive only one third of the refunds. By contrast, individuals are expected to pay one third, while receiving two thirds of the credits.

The move was seen as a huge win by environmentalists, who depicted B.C. as a leader in taking action on climate change.

"I think this is a landmark decision in North America as far as government addressing global warming," said Ian Bruce of the Suzuki Foundation.

"The B.C. government has decided to use one of the most powerful incentives at its disposal to reduce pollution," he added, saying he expects the move to help spur innovation.

Lisa Matthaus of Sierra Club B.C. agreed.

"This is the budget that is going to support the significant throne speech commitments from last year, in particular the carbon tax."

Not everyone was equally supportive.

"I think they were pretty quick to pull out the stick when it comes to accomplishing environmental objectives," said Laura Jones, vice-president at the Canadian Federation of Independent Business.

"We know from our surveys that over 80 per cent of business owners are already taking action to get cleaner," she added, saying that is happening without a tax in place.

"I don't think this is the best way to accomplish the goal of getting more environmentally friendly," she said, explaining she would rather have seen a greater focus on education and incentives.

Niels Veldhuis of the Fraser Institute also took issue with the plan.

"This was a lost opportunity for British Columbia in terms of improving the investment climate," he said.

"We had a real and historic opportunity to improve our investment climate, to ensure our prosperity going forward by aggressively reducing business taxes and personal taxes."

For example top earners in B.C. pay taxes almost 50 per cent higher than their counterparts in Alberta, he said.

Instead of reducing taxes they chose to "change the mix," he said.

Though the 2008 budget is clearly a green one, health care also figured heavily into the spending, accounting for more than one third of overall spending.

The government says it will also reduce taxes above and beyond the carbon tax offset by $481 million over three years.

It will also spend $787 million over four years to strengthen social services.

Following the prudence that has become a trademark of Taylor's budgets, the finance minister is putting aside about $1 billion to deal with any surprises, such as larger than expected financial troubles in the United States.

jfowlie@png.canwest.com

fionaanderson@png.canwest.com

British Columbians will be paying more at the fuel pump and less at tax time under a new carbon tax plan on all fossil fuels unveiled Tuesday as part of the Liberal government's budget.

The budget, introduced by Finance Minister Carole Taylor in the legislature in Victoria in the afternoon, also included breaks in personal and corporate taxes.

Finance Minister Carole Taylor introduces
the budget in the legislature in Victoria
on Tuesday afternoon. (CBC)

As part of the new tax plan, carbon-based fuels — including gasoline, diesel, natural gas and home heating fuel — will be taxed at $10/tonne of greenhouse gases generated, starting July 1, 2008.

That will translate into a new 2.4 ¢/litre tax on gasoline at the pump and 2.8 ¢/litre for home heating fuel.

The carbon tax rate will rise by $5 a year for the next four years, until it hits $30/tonne of greenhouse gas generated in 2012, said Taylor.

The tax will earn the government an estimated $1.85 billion, but Taylor said the plan will be revenue neutral. The government will give all of the money back to taxpayers in the form of tax breaks, she said.

Income tax rates for the first $70,000 earned will be cut by five per cent in 2009, giving B.C. the lowest personal income tax rate in Canada for those earning under $111,000.

The corporations' tax rate will also be cut one per cent to 11 per cent in 2009, and 10 per cent in three years, making B.C.'s corporate tax rates on par with the lowest in Canada.

In total, businesses in B.C. will pay a total tax rate of 25 per cent when federal and provincial taxes are combined, making B.C.'s corporate tax rate 10 per cent lower than the U.S. average, said Taylor.

She also said that in the first year there will be $100 rebate to every adult and child in the province to offset the cost of the carbon tax.

The budget follows the throne speech last week, which Premier Gordon Campbell and his government urged British Columbians to take personal responsibility for reducing climate change.

Taylor said that, just as Canadians learned from British Columbians about aerobics, whole grain breads and healthy lifestyles 20 years ago, so will people in the province teach the rest of the country what it means to tackle global warming.

With files from the Canadian Press

VANCOUVER -- Forget Ralphbucks: British Columbia is promising to rain down Greenbucks in its bid to sell a dramatic new, North America-first carbon tax that will grab more cash from the pockets of motorists and those heating their houses in the cold North while leaving big industrial emitters unscathed.

"We promised you green and today we deliver green," B.C. Finance Minister Carole Taylor said as she stood on stage in Victoria Tuesday to deliver the province's budget in a striking pair of green heels.

"This is an important turning point for B.C., and we think for Canada because we are out in front on this," she said, suggesting the new tax could raise up a new "social movement" -- regardless of whether any other province follows suit, and despite serious concern from businesses cringing at the prospect of working under a patchwork of different climate regimes across the country.

And though the government's own estimates suggest the carbon tax will only trim B.C.'s emissions by 4.5% -- far shy of Premier Gordon Campbell's commitment of a 33% cut by 2020 -- Ms. Taylor was unapologetic.

"We don't want to wait," she said. "We think it's important to take the first step."

In January 2006, the Alberta government sent $400 cheques -- known variously as resource-rebate cheques, prosperity cheques or "Ralph bucks" -- to virtually every man, woman and child in the province. The rebate program cost $1.4 billion.

Ms. Taylor pledged to issue a $100 cheque to every person in the province in the weeks leading up to the July 1 launch of the carbon tax, which will begin at $10 per tonne of fossil fuel-fired greenhouse gas production. That amounts to 2.4 cents per litre of gasoline and 50 cents per gigajoule of natural gas, amounts that will triple over the next five years as the carbon tax grows to $30 a tonne.

By then, the owner of a gas-loving pickup truck who drives 40,000 kilometres a year will see a fat $500 added to his annual fuel bill.

Emissions from landfills and agriculture -- as well as from makers of oil, gas, aluminum and cement -- will not be taxed. Together, those emissions make up 30% of the province's carbon footprint -- although some may be covered in a cap-and-trade system expected to be unveiled late this summer.

In total, the tax is expected to raise $1.85-billion over the next three years, but Ms. Taylor stressed that none of that money will be used for new government spending. Instead, it will be returned to taxpayers in the form of credits to low-income people and new tax cuts that will, in 2008, drop personal income tax for those earning up to $70,000 by 2% and trim business taxes by a percentage point -- down to 11% for corporations and 3.5% for small businesses.

That makes it dramatically different from a carbon tax announced in Quebec, which will raise far less, but use the money to fund green research, rather than returning it to taxpayers. A B.C. government analysis suggests a dual-income family of four making $60,000 a year and driving 20,000 kilometres a year could actually see a $5 net benefit from the plan in 2009, the year when further tax cuts are also planned.

In effect, the carbon tax will transfer funds from businesses to individuals, who will face one-third of the burden but see two-thirds of the benefits.

The carbon tax legislation will also enforce a 10% salary deduction to any future finance minister who does not uphold the revenue neutral promise, and includes a healthy dose of government nannying, including helpful charts outlining the savings from lifestyle changes such as tuning up a car, weatherizing doors and windows and switching to a high-efficiency furnace.

On climate change more broadly, the B.C. government earmarked $1-billion for home energy audits, bio-diesel production, electrical connections at the ports and the purchase of fuel-sipping cars and energy-efficient appliances.

It also committed an enormous $2.9-billion in new health care money, and won plaudits from both business groups, who appreciated the revenue-neutral carbon tax and the chances it brings for fresh savings, and left-wing opinion groups.

A tax of "seven cents per litre, is not going to change anyone's behaviour. But I think the cumulative effect over time, when people are looking to buy a new vehicle, etc. -- that's where you're going to see the impact," said Marc Lee, a senior economist with the Canadian Centre for Policy Alternatives.

"I would have liked to see something a bit more ambitious but I have to say it's very well-crafted."

Mining Industry Supports BC Budget

VICTORIA, BRITISH COLUMBIA--(Marketwire - Feb. 19, 2008) - The Mining Association of British Columbia (MABC) supported many measures in BC Budget 2008 but expressed caution on some issues that could impact the mining sector.

"The 2008 Budget and its climate action provisions offer the mining industry some clear opportunities to work with government to reduce greenhouse gases (GHGs) and ensure the long-term success of the industry," said Byng Giraud, Vice President of Policy and Communications.

"While any new tax is challenging, we welcome the government's clear commitment to revenue neutrality in the implementation of the carbon tax. We also applaud the government's gradual approach to implementation," added Giraud.

Further positives in the 2008 budget included:

- An immediate reduction in general corporate tax and the commitment to reducing that tax to 10% by 2011.

- The announcement of an additional $7 million to assist with environmental assessment and permitting in British Columbia.

- The provision of $10 million to assist First Nations with natural resource decisions.

- School tax rate reductions for major industrial property.

- $12 million for Geoscience BC.

- Government's willingness to delay consideration of applying the carbon tax to industrial processes and fugitive emissions until more consultation occurs.

On the other hand, the MABC expressed a number of concerns with Budget 2008. "Corporate income tax reductions will make up approximately 23 percent of the overall climate plan tax reductions, yet industry will pay approximately 60-70 percent of the new carbon taxes. From the point of view of industry, more work needs to be done to ensure true revenue neutrality for all sectors," commented Giraud.

The MABC estimates that the industry (including smelters and operating mines) in BC produces 3.3 million tonnes of GHG emissions. Therefore, the mining sector will pay approximately $33 million in carbon taxes in 2008/09 increasing to $99 million by 2012. These costs combined with expected higher electricity costs and possible additional costs imposed by a cap-and-trade system add considerable uncertainty to the sector.

"Any cap-and-trade system must allow for the creation of new mines and smelters," added Gavin Dirom, MABC Vice President of Environment, Health & Safety. "Poorly designed hard caps could effectively prevent industry growth, so we welcome the government's willingness to work with industry in the design of the cap-and-trade system. The commitment to integrating measures to avoid double taxation reflects this government's ongoing support of the sector."

FOR FURTHER INFORMATION PLEASE CONTACT:
Mining Association of British Columbia
Byng Giraud
Vice President, Policy & Communications
(778) 233-6449
Email: byng@mining.bc.ca
Website: www.mining.bc.ca

B.C.'s new carbon tax is being implemented unfairly, says the B.C.
Government and Service Employees Union, and will mean that families and low income earners will pay more than their fair share of the costs when the tax on energy consumption is fully implemented in four years time.

"The minister claimed that low income earners wouldn't be unfairly hit by the new tax," says BCGEU president George Heyman.

"But by 2012, the Liberals will only return a dollar in special credits to low income people for every two dollars they take in the form of added carbon taxes," Heyman charges. "That's hardly revenue neutral."

On the other hand, Heyman says, corporations will get preferential treatment from the Liberals. "The so called revenue neutral tax cuts to corporations are actually corporate subsidies lavish in comparison to those tax cuts received by individuals," he says.

Heyman also questioned whether the Liberals would be able to enforce a tough regime of carbon emission levels without additional staff in key ministries. "If this is an environment budget, then where are the staff needed to protect the public interest?"

On other key issues, "aside from the green budget focus," says Heyman, "the finance minister had only hot air or empty platitudes to deal with British Columbians' other priorities."

He was particularly critical that none of the new health care funding was specifically earmarked to expand home support services and residential care beds to help British Columbians deal with aging family members.

Heyman was also disappointed that there is no provincial funding for a new child care system, to help B.C. families deal with the long waitlists, high parent fees, and alarming shortage of qualified staff.

Meanwhile, on the social services front, Heyman says new money allocated in the budget still doesn't make up for the deep cuts implemented during the Campbell government's first term. And he questioned spending priorities like the Liberal's homelessness strategy. "It's a band aid-not a real solution," says Heyman.

"A real revenue neutral carbon tax budget would deal with homelessness, child poverty and environmental protection, and share the benefits of economic prosperity by increasing welfare rates and the minimum wage.

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Contact Stephen Howard, BCGEU communications 604-992-0105

VICTORIA - The biggest tax change announced in Tuesday's budget was the introduction of a carbon tax in B.C. - and a host of income tax and corporate tax cuts to ensure all the money collected by the new tax is returned to taxpayers in other forms.

But there were also a host of smaller tax changes for individuals and business announced in the budget.

Those affecting individual taxpayers include:

. The B.C. government will match the federal government's ecoAUTO rebate program for fuel-efficient automobiles, providing a Provincial Sales Tax reduction equal to the amount of the federal rebate.

. Homeowners will be able to leave their home for up to two taxation years for travel, work or schooling and still be eligible for the home owner grant or low-income grant supplement.

. The threshold for the First Time Home Buyer's program-- which exempts those buying their first home from paying the property transfer tax - has been increased from $375,000 to $425,000. The province has also eliminated the financing requirements of the program, meaning buyers will no longer be required to have a mortgage of at least 70 per cent of the purchase price to qualify.

. Energy efficient refrigerators, freezers and clothes washers with an Energy Star rating will be PST exempt.

. Residential gas-fired water heaters with an "energy factor" of 0.80 or greater will be PST exempt.

. Insulation for hot water tanks, water pipes and ductwork will be PST exempt.

. Electric-powered bicycles and tricycles will be PST exempt.

. Emission control devices for diesel vehicles will be PST exempt.

. Motorcycles and scooters that run exclusively on electricity will be eligible for a 50 per cent reduction in PST up to a maximum of $1,000. The exemption expires April 1, 2011.

. As of April 1, 2008, the passenger vehicle rental tax will no longer apply to passenger vehicles rented for eight consecutive hours or less. The government has also clarified that the tax should not have been applied in the past to vehicles used as part of a vehicle sharing program or on courtesy vehicles provided by mechanics.

. British Columbians with mental disabilities who a doctor certifies are unable to use public transportation safely will be able to apply for a refund of the fuel tax paid on gasoline purchases. Previously, the rebate was only available to those with physical disabilities.

. The gasoline tax in Victoria will increase from 2.5 to 3.5 cents per litre to help pay for regional transit services.

Those changes that affect businesses and charities include:

. All work-related safety equipment and protective clothing - such as safety goggles and work gloves - purchased by employers or self-employed people will now be PST exempt.

. Registered charities will no longer be required to collect PST on nominal items given in exchange for donations, like ribbons, key chains or pins.

. Hydrogen fuel-cell buses will be eligible for a PST reduction of 50 per cent up to a maximum of $10,000.

. PST will now be payable on coal and coke except when purchased for use in residential dwellings. According to the government, this brings coal in line with cleaner sources of energy, like natural gas, which are only PST exempt when purchased for residential use.

. Biodiesel and ethanol will be exempt from fuel tax, regardless of whether the fuels are used by planes, trains or ships. Previously, alternative fuels were only tax exempt if they were used in motor vehicles.

. The portion of the hotel room tax that is transferred to Tourism British Columbia will increase from 1.65 per cent to three per cent.

. As of the 2008 tax year, the provincial school tax rate will be reduced on major industrial properties such as pulp mills, sawmills, ports and mines - a tax reduction worth $12 million a year.

cskelton@png.canwest.com

Once you get clear of the thicket of climate change initiatives in the Liberal government's "balanced" budget you can see plainly that the rate of spending will surpass revenue.

That's right. Total government revenue is expected to grow at an average annual rate of 1.8 per cent over the next three years, while total expenses are forecast to rise by an average of three per cent.

Only through the magic of public sector accounting can governments can spend money faster than they bring it in and call the end result balanced.

The way government makes up the difference, of course, is by taking on more debt. The budget sees total provincial debt climbing from $37.7 billion in 2008/09 to $42.5 billion in 2010/11, an increase of $7.5 billion from the forecast in last year's budget.

Finance Minister Carole Taylor assures us that all is well because the ratio of debt to gross domestic product, which she described as a key measure of debt affordability, continues to decline. Sure enough, taxpayer-supported debt is forecast to drop from 14.1 per cent to 13.7 per cent over the next three years. However, this presumes taxpayers are not ultimately on the hook for the debt of Crown corporations. But they are. Toss the so-called self-supporting state companies and agencies into the mix and the ratio of GDP to total debt is expected to rise by a full percentage point -- from 18.4 per cent to 19.4 per cent. This ratio and its trend line might not concern the debt rating agencies, which use this taxpayer-supported version to assess the quality of the B.C's debt securities as an investment, but it should worry taxpayers.

While economic growth has been robust over the last five years, it has been slowly eroding with real GDP growth slipping from 4.5 per cent in 2005 to 3.3 per cent in 2006 and 3.0 in 2007. The forecast for 2008 is 2.4 per cent and the most optimistic prediction is a flat line below three per cent through 2012.

Tayor argued that B.C. has the second lowest ratio in Canada and its debt carries a triple A rating, matched only by Alberta and the federal government. Besides, she added, B.C. has big infrastructure needs. There are capital expenditure requirements for schools, roads, transit -- capital spending on health care alone is estimated at $2.7 billion. "We believe we are approaching this in a way that is sustainable in the long term," she said at a press conference before tabling the budget.

But if debt is not paid down when the economy is booming when will it be?

A sluggish economy will put increasing demands on government for support programs; it's not the ideal time for debt repayment. As the debt rises, the cost of servicing it increases. Indeed, the interest cost of debt is forecast to climb from $2.1 billion in the current fiscal year to $2.6 billion in 2010/11. To put that in perspective, interest on the debt in a single year is more than the budgeted increase in health spending over the next three years. It dwarfs the amount the government has committed to combatting climate change. It is triple the projected additional spending on social services.

If each British Columbian was responsible for his or her share of the provincial debt, the per capita obligation would be $7,992 this year, $8,500 next year, $8,888 in advance of the 2010 Winter Olympic Games and $9,320 in 2010/11. And this assumes population growth of about 177,000 people over which to amortize the debt.

Rather than address the clear and present danger of a growing debt, the government has chosen to chase the phantom of climate change with measures its own figures prove will achieve next to nothing in achieve its stated goal of reducing carbon emissions by one-third by 2020.

But Taylor's green budget will have a significant impact unrelated to global waming (or cooling). It will accelerate economic decline. It will fuel inflation. It will make all goods transported in B.C. more expensive, including food. It will depress investment because business and industry will bear the brunt of the carbon tax.

Think you're getting a break on the $100 climate action dividend? The carbon tax will add roughly $72 a year to your natural gas heating bill and a minimum of $36 a year to the cost of gasoline. Easy come, easy go.

The carbon tax will make less money available for things that really matter, like health services, education, childcare, homelessness, mental illness, crime, research and development.

There are so many measures the Liberal government could have taken to improve its citizens' lives --cutting the property transfer tax comes to mind -- but opted instead to buy into a narrative that charges everyone with the offence of simply being here. A new study by University of Alberta professor Bev Dahlby determined that corporate income tax rate reductions in 2001 increased GDP per capita by 18 per cent above the level that would have resulted without them while personal tax cuts increased output by 7.6 per cent. In other words, the tax cuts will raise average incomes of British Columbians by 25 per cent over the long term.

Now, there are tax cuts in the green budget -- a five-per-cent cut for the bottom two income brackets -- but most taxpayers will find that the benefit will be more than offset by the higher costs of almost everything as a result of budget measures that is committed to spending billions on hot air.