Finance Minister Carole Taylor introduced an escalating carbon tax on most fossil fuels today, one she says is designed to ignite an environmental social movement in British Columbia and across Canada to fight climate change. She also announced that every British Columbian will get $100 in June as seed money to get them thinking green.
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.
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.
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 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.
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.
For more details, see the following article "B.C. introduces carbon tax"