British Columbia's Carbon Tax Induced Economic Troubles Continue

While liberal economists try to convince us that British Columbia's carbon tax -- brought in on July 1, 2008 -- hasn't harmed its economy, the evidence continues to pile up against proponents of this tax. The latest release of Statistics Canada's labour force survey shows the problems this province's economy has been having since the carbon tax implementation.

---

The rest of Canada has seen the benefits of lower energy costs since mid-2008, but not British Columbia. The national average consumer price index for energy inflation has declined 10.4 percent over this period. On the other hand, in BC the decline was just 4 percent as the carbon tax prevented residents from experiencing a full reduction in energy prices that the rest of the nation enjoyed. Lower energy prices result in higher economic growth, so we shouldn't be surprised that BC's economy -- burdened by carbon tax induced higher energy costs -- has struggled relative to the Canadian average since July 2008. When the carbon tax was brought in, BC had an unemployment rate 1.8 percent lower than the national average. Now that gap is only 0.6 percent, showing clearly how job creation in the westernmost province is falling farther behind the rest of the country. Among 15 to 64 year olds, not only does BC currently have lower labour force participation (74.8 percent) and employment (70.1 percent) rates than the Canadian average (77.9 and 72.5 percent, respectively), but BC continues to fall further behind on these key economic indicators as well since the carbon tax began. Canada's overall participation rate is essentially unchanged since mid-2008, while BC's is down nearly 3 percent. Similarly, the national employment rate has declined just one percent during this time frame. BC's rate has dropped almost 4 percent -- four times faster than the national average. All the spin in the world can't massage this data into anything other than bad news for BC's economy -- timed in concert with progressively higher rates of carbon taxation. The lessons for other premiers are clear: if you want to harm your economy, follow British Columbia's lead and bring in a carbon tax.