Policy Commentary/Commentaire BC’s Carbon Tax Shift Is Working Well after Four Years (Attention Ottawa)

Abstract

British Columbia’s introduction in 2008 of a revenue-neutral carbon tax shift was controversial. This analysis compares changes in fuel consumption, greenhouse gas emissions, and gross domestic product (GDP) between British Columbia and the rest of Canada. It finds that in the four years since the tax was introduced, British Columbia’s per capita consumption of fuels subject to the tax has declined by 19 percent compared to the rest of Canada. At the same time, its economy has kept pace with the rest of Canada. British Columbia’s experience mirrors the European experience with carbon tax shifting and should inform the federal debate on climate change policy.