British Columbia’s Revenue-Neutral Carbon Tax

In 2008, British Columbia, a province of Canada (population 4 million), introduced a carbon tax, and so far so good both for the economy and environment.

Sales of fuels (subject to the tax) has dropped by 15 per cent, while the rest of Canada’s sales have increased by just over one per cent.

British Columbians emitted 10 per cent fewer greenhouse gases in 2010 than when the tax started, compared with five per cent fewer emissions for the rest of Canada.

The province’s GDP growth actually outpaced (by a little bit) the rest of Canada’s after the tax was imposed.

The tax applies to almost all fossil combustion, or 77 per cent of emissions. The rate was first set at $10 per carbon ton. Afterwards it rose by $5 per ton per year until it reached $30 as of July 1st, 2012.

All the carbon fee income is given back to households through personal income tax cuts, corporate tax cuts, low-income tax credits and the Northern and Rural Homeowner Benefit.

And public support for the carbon tax is on the rise. A recent poll shows that two thirds of British Columbians are in support of the policy whereas those strongly opposing the taxes have fallen to 17 per cent.


Carbon Tax Act.” 2008 Legislative Session: 4th Session, 38th Parliament.

Where Carbon is Taxed”. The Carbon Tax Center. Last updated: Jan 15, 2013.

Lake, Terry. “Comment: Support for B.C.’s carbon tax continues to grow”. Dec 20, 2012. Times Colonist.