Canadians Launch North America’s First Global Warming Tax

Mayor Scott Nelson is as concerned as anyone about global climate change, but also worries about how his town will be affected by a new carbon tax that could not come at a worst time for the lumber and ranching town located 340 miles north of Vancouver.

Like many communities, Williams Lake, British Colombia (BC), is struggling amid record high energy prices.  Effective July 1, the city’s residents will now be among the first North Americans to pay a levy that aims to curb global warming.

"The last thing they need now is a tax on top of these soaring prices to add insult to injury," Nelson told Reuters, predicting that a taxpayer revolt will eventually foil the new tax.

Although carbon taxes already exist in Europe, the new fossil fuel tax will make British Colombia the first jurisdiction in North American to implement a broad-based levy intended to cut the greenhouse gas emissions that are blamed for global warming.

The provincial government announced the tax in February, calling it a critical component in a pledge to reduce greenhouse gas emissions by one-third by 2020.

The tax applies to nearly all fossil fuels, including home heating fuel and gasoline.  It begins this year at C$10 per ton of carbon emissions, and increases by C$5 a ton for each of the next four years.

It would mean that beginning Tuesday, drivers would pay an additional 2.41 Canadian cents on a liter of gasoline (about 9.13 cents per U.S. gallon).  Gas currently sells for around C$1.40 per liter in Vancouver, the province’s largest city.

The government maintains the tax is intended to reduce carbon use, not generate new revenue.   The province will begin distributing one-time C$100 rebate checks to each resident this week, and is reducing other taxes to offset the new levy. 

But critics say it is nothing more than a new gasoline tax that unjustly targets poor and rural residents who must travel long distances in a province the size of France and Germany combined.

Political opposition has already kicked into gear, with the opposition left-leaning New Democratic Party launching an "axe the tax" initiative.  The party says it would focus the carbon tax on major industrial emitters and businesses rather than individual consumers.

The opposition federal Liberal Party also seeks a national carbon tax.  However, Prime Minister Stephen Harper opposes the plan, and his Conservative Party began an ad campaign this week against the tax.

Environmentalists admit the tax comes during a difficult time, but nevertheless want the provincial government to maintain its plan as an example for others.

"I think reversing it would be a huge setback for effective government action on this issue, certainly in Canada and I perhaps in all of North America," Matthew Bramley of the Pembina Institute, an environmental research group, said during an interview with Reuters.

Supporters of the tax deny it will harm the economy, and instead believe avoiding of the issue will cost far more in the long run due to the impact of global warming.

The government of B.C. estimates the tax will cut carbon emissions by about three million tons annually, the equivalent of the emissions of 787,000 cars.  But according to Nelson, soaring energy prices are already forcing people to reduce their energy use.