Reforming British Columbia’s Carbon Tax Plan

Currently, British Columbia’s carbon tax plan has serious design flaws that unnecessarily harm the economy. This essay makes the case for reforming BC’s existing carbon tax to mitigate its negative economic impacts and to explore potential ways to achieve this goal.

As part of efforts to improve the carbon tax plan, the province should aim to restore revenue neutrality by using carbon tax revenue to reduce broad-based tax rates, such as corporate and personal income taxes. And to enhance cost-effectiveness, the provincial government should prioritize repealing existing GHG-related regulations, mandates, and subsidies, and utilize the carbon tax as a mechanism to replace them.

By implementing a revenue-neutral approach and by repealing redundant GHG regulations and mandates, the provincial government could help alleviate the economic burdens associated with the current carbon tax.

Authors:

Ross McKitrick

Professor of Economics, University of Guelph

Elmira Aliakbari

Director, Natural Resource Studies, Fraser Institute

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