BCP’s Chief Economist and former Governor of the Bank of Canada has slammed the BC government’s carbon tax plan as “stupid”.
The BC government announced it would end the $12 per tonne carbon tax at the end of the year, effectively killing the tax and costing the province $20 million.
“It is a stupid plan that would lead to higher costs and greater carbon emissions than the BC Liberals have committed to,” wrote Kevin Milligan in a blog post published on Friday.
In his opinion piece, Milligan said that, if the government is serious about reducing carbon emissions, it would need to take the following steps: 1.
Reduce the tax rate from 20 per cent to 10 per cent 2.
Eliminate the carbon intensity tax 3.
Make it more expensive for small businesses to sell goods that emit less carbon, such as electric cars and home appliances.
BC’s carbon intensity levy is set to increase by $2.50 per ton of carbon emitted by 2019, according to the province’s website.
BCP has estimated that the carbon levy would cost the province up to $2 billion in additional revenue and, if implemented, would add $2 to the budget of the B.C. Liberals.
But the BCP also argues that it is not realistic to expect that the BC Liberal government would be able to cut its carbon intensity requirement from 20 to 10 cents per ton in a year, and that BC will have to increase the levy to $10 per ton by 2019.
This would result in the carbon price going up from $7 to $15 by 2019 for each additional ton of emissions.
Milligan argues that, at the current carbon intensity level, BC would have to reduce its carbon tax from $12 to $9 per ton.
The BCP has said it will continue to look at the BC carbon tax as a potential model for reducing emissions and it will report its findings in the next fiscal year.
Meanwhile, the federal government has announced that it will also phase out its carbon price, meaning that the price will drop from $10 to $7 per ton and from $9 to $5.50 by 2019-20.