Marc Lee: B.C. budget offers inaction on climate change

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      By Marc Lee

      The 2010 B.C. budget was a disappointment on the climate action front. Even as Premier Campbell waxed poetic in the Globe about the impact of climate change on the “Spring Olympics”—with its sunny days, crocuses, daffodils, and cherry blossoms making it fun for people on the street but a big mess up at Cypress Bowl—the budget offered little assurance that this government still cares.

      Instead, the budget is best symbolized by the Olympic flame, whose massive size and burning cauldrons make a fitting monument to the oil and gas industry, a testament to our brazen determination to burn fossil fuels.

      Subsidies to the oil and gas industry remain untouched in the budget, and royalties paid by the sector are half of levels in previous years, in part due to royalty reductions from last August’s “oil and gas stimulus package” (like they really needed it). In addition, in the budget’s transportation investment plan, 86 percent of provincial funds go to roads and bridges, including favoured projects like the Gateway highway expansion program and the “oil and gas rural road improvement program.”

      There was some expectation that the government would announce a plan for the B.C. carbon tax, which hits $30 a tonne in July 2012, then hits a wall. If I were a businessperson in B.C., I would want to know the outlook post-2012 and what this meant for capital investments in the near term. But there was silence on that front, and no mention of extending the tax to cover major sectors not currently covered by the tax, like aluminum, cement, lime, and (you knew this was coming) much of the oil and gas industry.

      From a climate justice perspective (i.e. making sure that climate change initiatives don’t have an unfair impact), it’s troubling that the budget includes no increases to the low-income carbon tax credit, which more than offset the carbon tax for the bottom 40 percent of income earners in year one (starting July 1, 2008), and roughly neutralized it in year two. The growth of the credit is not keeping up with the growth in the tax, and will make the overall regime regressive as of July 1, 2010—thus placing a greater burden on low-income folks who have done the least to contribute to the problem in the first place.

      Since its inception, the carbon tax and revenue recycling regime was regressive at the top, meaning the top 20 percent of income earners get back more in tax cuts than they pay in carbon tax. The government’s unwavering commitment to use carbon tax revenues to fund personal and corporate tax cuts, which are not needed and which will have essentially no economic impact, comes at the expense of measures that really would change behaviour, like improvements to public transit (the latter being a fascinating experiment and positive outcome of the Olympics). True, the government has put in funds for the Evergreen Line, but it’s also hamstrung TransLink’s ability to raise funds to actually get the project off the ground.

      The budget does breathe some new life into LiveSmart, a program for energy efficiency upgrades that ran out of money last year when it was oversubscribed. The budget provides new money of $35 million over three years, which is better than nothing but rather small. It is a lost opportunity, given that unemployment rates are double what they were a year ago, and this program develops green jobs. There are also some flaws in the program that still need to be fixed; for example, it encourages use of natural gas furnaces and hot water heaters that produce the greenhouse gas carbon dioxide.

      The budget commits $100 million over three years to vaguely defined “climate action and clean energy”, which is linked to an upcoming Clean Energy Act to be tabled this sitting. The act has many concerned about the province running roughshod over local interests to ramp up private power production for export to the U.S. (perhaps in conjunction with a new deal signed by Campbell and Schwarzenegger during the Olympics).

      The budget states that this money will be used to support investments (read: subsidize the private sector) in biofuel production, new electricity generation, and “infrastructure to support cleaner transportation choices”. While some of this may be a useful contribution, we will have to wait for more details when the new legislation is tabled.

      So overall, we need some regime change on the climate front if B.C. is to live up to its rhetoric and awards from environmental groups.

      Marc Lee is the senior economist at the B.C. office of the Canadian Centre for Policy Alternatives and codirector of the Climate Justice Project, a research partnership with UBC’s school of community and regional planning that examines the links between climate change policies and social justice.



      I call BS

      Mar 4, 2010 at 10:47pm

      "personal and corporate tax cuts, which are not needed and which will have essentially no economic impact"

      This is a totally unsupported and false statement. Corporate tax cuts are the fastest path to job growth, and they are exactly what we need when unemployment is high. Canada is in a very good position to pick up investment money that's leaving the US amidst ballooning debt and a flopping dollar. We need to capitalize on that and make BC the most attractive place in Canada for businesses to relocate to so that we can get real growth in our job market (instead of phony, unsustainable growth from so-called 'stimulus' money).

      If we don't take this approach, the money we spent raising our profile with the olympics and building a new conference center really was wasted.

      Chris Ryan

      Mar 5, 2010 at 12:49am

      Marc, on the contrary!!! I am utterly delighted that there was no more of our tax money thrown at the Climate Change fraud. I want every nickle that has been thrown at it back.

      Having read the Climategate e-mails, all of them, plus the analysis done by Dr. John Costella, the United States Senate Committee on Environment and Public Works Report, "'Consensus' Exposed: The CRU Controversy" dated February 2010 and the comments of Dr. Phil Jones in his BBC Television interview in which he states that "there has been no statistically significant global warming in the last 15 years", the fact that the Himalayan glaciers, far from melting by 2035 as the IPCC report states are in fact advancing, the fact that arctic ice summer minima have expanded by 22,000,000 square kilometers in the last 2 years and the fact that the average global temperature has been declining for 15 years (leading Dr. Mike Mann of Penn State to falsify graphs submitted to the IPCC for publication), I have come to the conclusion that anyone bleating for more money to be thrown down this rat-hole is either of diminished intellect or a party to the fraud.

      I have long thought the Canadian Centre for Policy Alternatives to be a collection of people with no common sense. Your article removes any doubt I may have had.

      Good on you Gordo!!


      Mar 5, 2010 at 9:07am

      Since its inception, the carbon tax and revenue recycling regime was regressive at the top, meaning the top 20 percent of income earners get back more in tax cuts than they pay in carbon tax.

      How can anyone be surprised by this? Really?

      The raging enthusiasm for Dion's Green Shift and the BC Carbon Tax among university economists and the better financed environmenatl NGOs was clearly predicated on the role carbon taxes could play in reducing income taxes. In addition, some green energy business interests and their economist gurus saw it as a convenient political fig leaf for the things they really wanted from the BC Govt, lax environmental approvals and high prices guaranteed by BC Hydro. But consider the income tax angle for a moment.

      This is how the SFU news covered a report on the issue of carbon taxes in 2008:

      The Canadian Press, Canwest News Service, CBC Radio and TV, CTV, GlobalTV and La Presse Canadienne covered a new report saying the average Canadian would see a 50-per-cent income tax cut if the federal government phased in a new tax to crack down on activities that contribute to global warming. The authors: environmentalist David Suzuki and SFU’s Mark Jaccard.

      Please note the emphasis. The big deal is lowering income taxes, while climate impacts are treated as secondary. There's a clue in there for anyone who want's to see it, anyone who is not blinded by the green rhetoric or bedazzled by the mere mention of a telenvironmenalist's name.

      Rod Smelser