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B.C.’s Prized Carbon Tax: A Primer

B.C.’s carbon tax has been called both elegant and a template for the rest of the world. Because it increases taxes on things we don’t want (emissions), reduces taxes on things we do want (income), is popular with the public and has actually worked to reduce the province’s carbon footprint, it’s been called a win-win-win-win.

So how does it work?

Pretty simply: if you burn fossil fuels (oil, gasoline, natural gas, etc.), you pay the tax. British Columbians see the tax on their heating bills and at the pump when they fill up their cars. But because the system is designed to be revenue neutral, British Columbians also see the benefits of the tax feeding back into the system, benefiting consumers through tax credits and breaks.

Every dollar collected by the government through the tax (approximately $1 billion annually) is funnelled back to the people of B.C.

The system also has the highest price on carbon pollution: $30 per tonne — although B.C. got there gradually growing from $10 per tonne in 2008 to $30 in 2012.[view:in_this_series=block_1]

As in Quebec’s system, this gradual price increase gave businesses and British Columbians time to adjust to the incremental rise in costs. In 2008, the carbon tax resulted in a two-cent increase on a litre of gas.

Unlike Alberta’s carbon levy and cap and trade, this $30 must be paid on every single tonne emitted. They are no ‘caps’ on emissions with the carbon tax: the price alone is meant to drive down emissions.

A report released in 2013 — five years into the carbon tax — showed the system had been a resounding success: within four years, B.C.’s per person fuel consumption had dropped 17.4 per cent while in the rest of Canada that number grew by 1.5 per cent.

Total carbon emissions also dropped by 10 per cent during that time while the B.C. economy continued strong. And, amazingly, the carbon pricing mechanism is B.C.’s most popular tax. Who knew there was such a thing?

There are some downsides to B.C.’s prized carbon tax, however.

B.C.’s revenue neutral model means taxes collected are immediately returned to the system and aren’t redirected toward renewable energy, for example.

In the Alberta and Quebec systems, revenue on allowances or credits makes its way into clean technology or green funds. 

The biggest stain on the carbon tax’s nearly spotless reputation is B.C.’s booming natural gas sector. Due to loopholes, the gas industry is exempted from paying for enormous amounts of vented and fugitive methane emissions or for enormous refrigeration facilities used to cool natural gas to create liquefied natural gas (LNG).

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And the Christy Clark government’s push for massive LNG exports will likely prevent B.C. from meeting its goal of a 33 per cent reduction in emissions by 2020. 

Image Credit: Magnus Larsson via Flickr

Another year of keeping a close watch
Here at The Narwhal, we don’t use profit, awards or pageviews to measure success. The thing that matters most is real-world impact — evidence that our reporting influenced citizens to hold power to account and pushed policymakers to do better.

And in 2024, our stories were raised in legislatures across the country and cited by citizens in their petitions and letters to politicians.

In Alberta, our reporting revealed Premier Danielle Smith made false statements about the controversial renewables pause. In Manitoba, we proved that officials failed to formally inspect a leaky pipeline for years. And our investigations on a leaked recording of TC Energy executives were called “the most important Canadian political story of the year.”

We’d like to thank you for paying attention. And if you’re able to donate anything at all to help us keep doing this work in 2025 — which will bring a whole lot we can’t predict — thank you so very much.

Will you help us hold the powerful accountable in the year to come by giving what you can today?
Another year of keeping a close watch
Here at The Narwhal, we don’t use profit, awards or pageviews to measure success. The thing that matters most is real-world impact — evidence that our reporting influenced citizens to hold power to account and pushed policymakers to do better.

And in 2024, our stories were raised in legislatures across the country and cited by citizens in their petitions and letters to politicians.

In Alberta, our reporting revealed Premier Danielle Smith made false statements about the controversial renewables pause. In Manitoba, we proved that officials failed to formally inspect a leaky pipeline for years. And our investigations on a leaked recording of TC Energy executives were called “the most important Canadian political story of the year.”

We’d like to thank you for paying attention. And if you’re able to donate anything at all to help us keep doing this work in 2025 — which will bring a whole lot we can’t predict — thank you so very much.

Will you help us hold the powerful accountable in the year to come by giving what you can today?

Derek Leahy
Derek was born and raised in Brooklin and now lives in Ottawa. He worked in Germany for eight years as a historical tour guide. He attended the Copenh...

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With headlines blaring about tariffs, a trade war and a 51st state, it can be easy to feel helpless. Here’s where I see hope: The Narwhal is reporting doggedly on issues surrounding the natural world in Canada that feel so under threat today — including the autonomy and sovereignty of Indigenous Peoples. It’s why I’m a member — and why I hope you’ll be one of 400 readers who joins me this April. Sign up now and receive a Narwhal tote bag as a gift of thanks! — Tanya Talaga, journalist, author and recent Narwhal board chair
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