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Christy Clark is peddling a recipe for economic damage that the rest of Canada should ignore.

BC Premier Trying to Sell a Carbon Tax Failure to the Nation



It is carbon tax season. Current and former politicians in Canada are out in force trying to sell the concept to the public, and especially to other politicians.
The latest example is British Columbia Premier Christy Clark, who was in Toronto on Monday visiting a fellow Liberal Party premier -- Kathleen Wynne of Ontario -- with her taxation sales job. In the Globe and Mail, Adrian Morrow reported some interesting data:
“B.C.'s tax has driven the province's greenhouse gas emissions down by 16 per cent. In force since 2008, it levies $30 on every tonne of carbon -- about seven cents, for instance, on a litre of gasoline. In that time, the province's economy and population have grown faster than the national average. The B.C. government cut income and other taxes to ensure the overall burden remains the same.”
The supposedly revenue-neutral carbon tax was implemented on July 1, 2008. Between July 1, 2008 and July 1, 2014 (the latest data available), the Canadian population grew 6.9 percent, while the population of Ms. Clark's province grew less than 6.5 percent. So, apparently the province's population has not grown faster than the national average. By even the province's own numbers, the tax has been a failure in its core objectives. Morrow's story claims that “B.C.'s tax has driven the province's greenhouse gas emissions down by 16 per cent.” You can download the province's British Columbia Greenhouse Gas Inventory and associated data files from the provincial environment ministry website, and they tell a far different story. The latest year of GHG data is 2012, coming from the latest report in 2014. Between 2007 (the last full year without the carbon tax) and 2012, BC's GHG emissions only declined 4.4 percent. The emissions reductions in the energy sector over this time frame were only 3.3 percent. Neither of these numbers is the 16 percent provided in the Globe and Mail article. But here is the real story: BC's GHG emissions were already on the decline before the carbon tax came into effect. Emissions peaked in 2004, and between 2004 and 2007 total GHG emissions declined 5.4 percent while those in the energy sector decreased by 5.7 percent. In other words, the province's rate of GHG emission reduction has actually slowed substantially since the carbon tax was brought in.

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The GHG emissions per dollar of GDP declined by 16 percent in the three years prior to the carbon tax, but only declined by 9.8 percent in the five years after the carbon tax. Once again, the rate of emission reduction declined substantially post-carbon tax. GHGs emitted per unit of energy in the province declined 5.3 percent between 2004 and 2007. Instead of the declining trend continuing, especially accelerating downwards (which is the effect a useful carbon tax should be having), the emissions intensity actually increased slightly by 0.3 percent in the carbon tax regime. These are not promising results. After remaining constant for the decade prior to the carbon tax, energy intensive aluminum production in the province declined by almost 25 percent since the punitive tax started. Sales of other energy intensive goods such as wood products, pulp and paper, and concrete and cement have also declined precipitously since the carbon tax. Residential energy intensity is unchanged since 2008, as is residential energy efficiency, while residential emission intensity (in kg CO2e/GJ) has increased since the carbon tax began -- despite having a decreasing trend before the tax was implemented. In the six years up to 2013 since the carbon tax, BC's real per capita GDP only grew 3.16 percent, barely ahead of the Canadian average at 3.08 percent. This carbon tax period had the province's per capita economic growth performance ranked fifth among the ten provinces -- behind Saskatchewan, Manitoba, Alberta, and Nova Scotia, and just slightly ahead of Quebec. Compare that to the six years before the carbon tax, when British Columbia had the second highest real per capita GDP growth rate among the provinces. Quite the pre-to-post carbon tax reversal in growth rank, all under the same Liberal Party government that brought in the carbon tax and presided over the entire pre- through post-tax period. Since the carbon tax, real per capita household income in BC has grown only 6.2 percent, placing it 8th among 10 provinces (aka, third worst). On an annual basis, the national unemployment rate increased just 1.0 percent since 2008. In BC, the increase was two percent. The data shows that the carbon tax hurt the economy and appears to have done little -- if anything -- to reduce emissions. That is the definition of a failure. And if the tax wasn't a failure, why has the provincial government refused to increase the levy? The answer is because the BC government knows the tax is a failure, but there is likely political pressure from the federal Liberal Party and other left-wing premiers (such as Wynne and Alberta's Jim Prentice) to promote carbon taxation -- after all, Justin Trudeau is running on a pro-carbon tax platform -- along with the undesirability of Premier Clark having to admit her own predecessors in the provincial party were wrong to bring in the BC carbon tax. It is bad enough the BC government cannot admit its own carbon tax mistake, but it is even worse for this province to try and convince the rest of the nation to follow its failures.


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Sierra Rayne -- Bio and Archives

Sierra Rayne holds a Ph.D. in Chemistry and writes regularly on environment, energy, and national security topics. He can be found on Twitter at @srayne_ca


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