British Columbia carbon tax

British Columbia's carbon tax and accompanying tax shift has been in place since 2008. It is a British Columbia policy which adds additional carbon taxes to fossil fuels burned for transportation, home heating, and electricity, and reduces personal income taxes and corporate taxes by a roughly equal amount. The carbon tax is collected at the point of retail consumption (for example, at the pump for gasoline and diesel). British Columbia's policy is unique in North America; only Quebec has a similar retail tax but it is set at a much lower rate and does not include a matching tax shift.

Public opinion polls in 2007 showed that the environment had replaced the economy and healthcare at the most important issue to a majority of respondents. This cultural change, brought about by greater media and political attention both inside and outside of Canada, changed the political dynamic of British Columbia. Traditionally the left-leaning BC New Democratic Party (NDP) had been seen as the greener of the two largest parties, as opposed to the more free market BC Liberal Party. However, in 2008 it was the Liberals who introduced the carbon tax and tax shift, which was thought to be a more market-friendly method of regulating carbon than the competing idea of cap-and-trade which the NDP supported. During the 2009 British Columbia election the NDP as well at the BC Conservatives made repealing the carbon tax part of their platform, but the Liberals won another majority government.

In 2016, a similar measure was put on the ballot in the neighboring State of Washington. Washington Initiative 732 would, like the British Columbia carbon tax, impose a steadily rising tax on carbon emissions, while offsetting the state's sales tax and business tax, while expanding the state's tax credit for low-income families.

On February 19, 2008, the Government of British Columbia announced its intention to implement a carbon tax of C$10 per tonne of Carbon dioxide equivalent (CO₂e) emissions (2.41 cents per litre on gasoline) beginning July 1, 2008, making BC the first North American jurisdiction to implement such a tax. The tax was to increase each year until 2012, reaching a final price of $30 per tonne (7.2 cents per litre at the pumps). Unlike previous proposals, legislation was to keep the pending carbon tax revenue neutral by reducing corporate and income taxes at an equivalent rate. The government also planned to reduce taxes above and beyond the carbon tax offset by $481 million over three years.

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