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Green Transport - Green Taxes

We’re brewing something very interesting in the BCSEA - and it feels as if we have discovered buried treasure.

The insight started soon after the election, when the government announced that BC would be moving to the Harmonized Sales Tax (HST). When we looked at what was being proposed, we saw that in the changeover, all the PST tax-breaks for things such as bicycles, solar panels and home insulation would disappear, but the long-standing tax-breaks for transport and heating fuels would remain.

This was a real head-scratcher. When everything includes the full HST except heating and transport fuels, that creates a 7% subsidy for fossil fuels - at twice the level of the current carbon tax (3.5 cents per litre). In effect, it turns the carbon tax into a negative carbon tax, which is the opposite of what the government says it wants.

The motivation for keeping the subsidy is easy to understand, for nobody likes new taxes, and to declare a 7% tax increase on heating and transport fuels on top of the HST would not have been exactly popular.

Even so, how can it be right to subsidize the very fuels that are causing climate change and air pollution, while trying to turn BC into a “Clean Energy Powerhouse”? It makes no sense.

When we spoke to high-level contact at BC’s Tax Policy Division, we learned that by keeping the subsidy, BC was forgoing $300 million a year in transport-related income, and $200 million a year in buildings-related revenue - money which could be used to fund the much-needed transition to sustainable transport and sustainable buildings.

The campaign we are brewing, therefore, is to build public support for the idea of lifting the 7% subsidy in heating and transport fuels (whether in PST or HST doesn’t matter), and using the income to create two major new dedicated funds, one for sustainable transport (transit, cycling, ridesharing, etc), and one for sustainable buildings (energy efficiency retrofits, an energy efficiency loan fund, free insulation for people on lower incomes and over the age of 70, etc.).

The scale of what’s possible is enormous. The newly announced LiveSmartBC budget for efficient buildings is $35 million over three years. We’re talking $200 million a year.

The challenge will be to build a strong base of public support, and to win all-party support of the Liberals, NDP and Greens, so that the move does not become a political football.

At the end of the day, if a party wants to argue for keeping the fossil fuels subsidy, they have to come up with a very good argument for doing so, when these are the very same causes of air pollution and climate change, that all parties are pledged to reduce.

In the big picture, this is nibbling at the edge of the need for much more wide-ranging green fiscal reform, so that BC’s economy is no longer dependent on fossil fuel revenues.

If you have any thoughts that could help us build this campaign, which includes building a strong coalition of allies, please let us know.

Guy Dauncey
President, BCSEA