Local Government Share of Provincial Carbon Tax Revenues

Year
2010
Number
B76
Sponsor(s)
Metro Vancouver

WHEREAS the Province implemented a carbon tax, beginning 2008 through 2012, on greenhouse gas emissions stemming from the purchase and use of fossil fuels in British Columbia, to induce market responses resulting in reduced greenhouse gas emissions; AND WHEREAS under the Local Government Act, local governments are required to establish greenhouse gas reduction targets, policies, and actions in official community plans and regional growth strategies to support provincially legislated greenhouse gas reduction targets; AND WHEREAS local governments require additional fiscal resources to implement new actions to reduce greenhouse gas emissions to support provincially legislated greenhouse has reduction targets: THEREFORE BE IT RESOLVED that the UBCM request the Province to provide local governments with their per capita share of provincial carbon tax revenues to support capital and operating costs associated with new greenhouse gas emissions reduction actions implemented by local governments and regional transportation authorities to support provincially legislated greenhouse gas reduction targets.

Provincial Response

Ministry of Finance The Province currently provides funding to local governments through a variety of sources and programs e.g. Traffic Fine Revenue Sharing, Towns for Tomorrow, Building Canada Fund, unconditional Small Community and Regional District Basic Grants. The Province also provides conditional grants to local governments under the Climate Action Revenue Incentive Program. Under the program, eligible local governments receive a grant equal to 100 per cent of the carbon tax paid as a direct expenditure in the previous year. To date the program has provided nearly 2.9 million to local governments. A key element of the carbon tax is that it be revenue neutral, meaning that all revenues collected from the carbon tax are returned to taxpayers and businesses through tax reductions. The three-year Revenue Neutral Carbon Tax Plan laid out in Budget 2010, shows the tax cuts introduced to date to return carbon tax revenues to taxpayers. The personal tax measures are: a Low Income Climate Action Tax Credit of 105 per adult and 31.50 per child which will increase to 115 per adult and 34.50 per child effective July 1, 2011; reduction of five per cent in the first two personal income tax rates and a Northern and Rural Homeowner benefit of up to 200 starting for the 2011 taxation year. The business tax measures are: a general corporate income tax rate cut from 12 per cent to 11 per cent effective July 1, 2008, to 10.5 per cent effective January 1, 2010 and to 10 per cent effective January 1, 2011; small business corporate income tax rate reduced from 4.5 per cent to 3.5 per cent effective July 1, 2008, to 2.5 per cent effective December 1, 2008 and to zero by April 1, 2012; Industrial Property Tax Credit of 50 per cent of school property taxes payable by light and major industrial properties starting in the 2009 taxation year and rising to 60 per cent in 2011 and a school property tax credit of 50 per cent for land classified as farm starting in 2011. The personal and business tax measures are expected to exceed carbon tax revenues by 69 million for 201011, by 67 million for 201112 and by 123 million for 201213. The government has introduced a number of measures and programs in the past several years 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; - 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 for Communities 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 are available to local governments to help them undertake integrated sustainability planning and action.

Convention Decision
Endorsed