WHEREAS the Province has implemented the British Columbia Revenue Neutral Carbon Tax on fossil fuels as part of its commitment to reducing greenhouse gas emissions throughout BC; AND WHEREAS local governments have raised concerns that the Carbon Tax is not revenue neutral for local governments, thereby acting as a barrier to funding greenhouse gas reduction initiatives within their communities; AND WHEREAS local governments have identified concerns over the application of the tax, citing its inequitable impact on some parts of the province: THEREFORE BE IT RESOLVED that the Province of British Columbia examine the application of the BC Carbon Tax with the intent of mitigating impacts and creating incentives for local governments and residents to reduce their greenhouse gas emissions; AND BE IT FURTHER RESOLVED that the UBCM lobby the provincial government to mitigate the carbon tax in areas where residents cannot make choices about their fuel consumption due to distance, climate and resource based livelihoods.
Ministry of Finance A key element of the tax is that it be revenue neutral, meaning that all revenues collected from the carbon tax will be returned to taxpayers and businesses through tax reductions. Under the three-year Revenue Neutral Carbon Tax Plan laid out in Budget 2008, the government has introduced a personal income tax cut on the first 70,000 in income of two percent in 2008, rising to five percent in 2009, with further cuts planned. Tax cuts since 2001 have resulted in British Columbians generally enjoying the second lowest overall tax burden in the country and, by 2009, individuals earning up to 111,000 in this province will pay the lowest income taxes in Canada. The general corporate income tax rate was reduced from 12 percent to 11 percent effective July 1, 2008, and over the next three years it is expected to fall to 10 percent, which is on par with the lowest rates in the country. The government also reduced the small business tax rate from 4.5 percent to 3.5 percent effective July 1, 2008, and it is expected to fall to 2.5 percent by 2011. These tax cuts, combined with all the previous tax cuts brought in by government since 2001 and the other tax cuts introduced in Budget 2008, provide British Columbia with an extremely competitive tax system for business. As well, the government provides a number of programs and tax incentives to help make greener choices easier, more accessible and more affordable for British Columbians, including local governments. There are provincial sales tax PST reductions for hybrid and alternative fuel vehicles, and a new tax reduction for fuel efficient vehicles. There are also PST exemptions for a number of energy conservation materials such as insulation, weather stripping and alternative energy systems. Overall, the impact of the carbon tax will depend more on the personal circumstances of British Columbians than where they live in the province, although geographic location is a factor. With respect to home fuel consumption, data on natural gas use by residential customers shows that while residents in some northern regions have higher average consumption than the Lower Mainland, residents in the Lower Mainland use more gas per household than residents in most other regions of the province. In addition, after taking into account the carbon tax, customer usage, and the different rates across the regions, the average total cost for those using natural gas is higher in the Lower Mainland than all other regions of the province, with the exception of Fort Nelson which is slightly higher. Similarly, while some living in remote areas may drive further distances on average than those living in cities and small towns, Statistics Canada 2006 Census Journey to Work data show that, on average, commuting distances to and from work for residents of municipalities in the Lower Mainland are among the highest in the province. In addition, compared to other regions of the province, a larger percentage of commuters in municipalities in the Lower Mainland have to travel 15 km or more to get to work. Drivers in the Lower Mainland will also generally use more fuel per kilometre because of idling and traffic congestion. In addition to the tax cuts made possible by the revenue neutral carbon tax, the government will continue to carefully monitor the impact of the carbon tax and will consider other tax reductions where necessary and tax incentives where effective within the context of the governments overall fiscal situation and other priorities such as health care and education. Beyond the tax reductions made possible by the revenue neutral carbon tax, the government has introduced a number of measures and programs to encourage and assist local governments to reduce their greenhouse gas emissions. For example: 136 million to support local government infrastructure projects in communities with populations of less than 100,000; 100 million to support public transit infrastructure investment; 20 million to help switch remote communities, mainly First Nations, from diesel-generated power plants to sources of clean electricity, and to improve the energy efficiency of their homes and businesses; 21 million for Towns for Tomorrow that provides infrastructure funding for smaller communities; 40 million for LocalMotion to build bike paths, develop accessible trails and walkways to encourage alternative transportation; 2.5 million for Green City Awards which provide cash awards to local government achieving integrated design and management that encourages physical activity, energy conservation and environmental benefits; The Community Action on Energy Emissions program which provides funding research assistance towards studies, policy work and implementation related to energy conservation and emissions reductions. As well, the Smart Planning Initiative empowers communities to undertake planning that is longer-term, incorporates sustainability principles and leads to more compact, complete and energy efficient communities with reduced greenhouse gas emissions. As part of this initiative sustainability facilitators will be available to local government to help them undertake integrated sustainability planning and action.