A Revenue-Neutral BC Carbon Tax

Mention the word "tax" to most people and you'll often get a rant about how much the government skims from their paycheques. The carbon tax we're talking about, however, is revenue neutral. In other words, it won't add any money to government coffers and should even leave you with more money in your pocket. Here's how a carbon tax works.

How Does a Carbon Tax Work?

A tax is placed on the use of all fossil fuels -- oil, gas, coal -- according to the amount of greenhouse gases they emit. The prices of goods and services, including the direct purchase of fossil fuels, will shift to reflect their contribution to global warming. Let's say you are trying to decide whether to continue heating your home with oil or to install an energy-efficient heat pump. The carbon tax might be the incentive you need to switch to a heat pump.

How to Offset a Carbon Tax

The goal is to foster carbon-friendly lifestyles, not to increase the total tax burden on British Columbians. To offset the carbon tax, provincial sales tax or income taxes would be reduced (with more of the return going to lower- and no-income tax brackets). If you choose goods and services that create fewer greenhouse gas emissions, the carbon tax could leave your bank account a little heftier. Notably, carbon taxes are already in place in Quebec, Norway, Finland, Holland, Denmark, Austria, Germany, the United Kingdom and Italy.