The B.C. New Democrats are planning to broaden the scope of the carbon tax they vowed to scrap in the last provincial election to help pay for their election promises.
The commitment marks a turnaround in the opposition party's views of the tax introduced by the Liberals under then-premier Gordon Campbell in 2008 to put a price on carbon. The tax was aimed at reducing the use of fossil fuels and greenhouse-gas emissions. It has been revenue neutral, which means the money it generates pays for tax cuts.
During a news conference Thursday, NDP finance critic Bruce Ralston and platform co-chair Carole James said the NDP, if elected, would increase the number of activities covered by the tax to include vented emissions from oil and gas operations in a bid to capture another 5 per cent of carbon emissions.
The fiscal plan the party released Thursday says the measures would add $205-million in revenue between 2014 and 2017. The money would go toward a pool of revenue to pay for the NDP platform, which is to be outlined piece by piece during the election campaign that begins Tuesday. The B.C. Liberals are seeking a fourth term on May 14, while the New Democrats are hoping for a return to government for the first time since 2001.
If elected, the party would bank on a mix of tax hikes and re-allocations in Liberal spending commitments to raise $311-million for 2013-14, $733-million for 2014-15, and $988-million for 2015-16. In a preview of its platform, the party said it would create a new child care and early education plan and repurpose the Liberal-created early childhood tax benefit as part of a new poverty-reduction strategy. The NDP would aim to balance the budget in four years.
Mr. Ralston told reporters the carbon-tax change was not an increase – just a "slight increase" in the base of the tax that would raise coverage of the carbon tax from 70 per cent of emissions to 75 per cent. He said the NDP would work with the energy sector on how to best implement it.
As party leader, Ms. James strongly opposed the tax as unfair to consumers, was at the forefront of an "axe the tax" drive and vowed, in the 2009 campaign, to scrap it were she elected premier. Her party was defeated.
However, the NDP has since modulated its views to support the tax, although it has previously called for using part of it to pay for transit infrastructure or green initiatives to reduce emissions. That would essentially mean the tax would not be revenue neutral.
In an interview, Mr. Ralston said the voters settled the carbon-tax issue in 2009 by re-electing the Liberals. "It was certainly one of the key issues in the election and [the Liberals] won the election campaigning on the basis of having a carbon tax. We campaigned against it so that made a change in our views."
During the 2009 campaign, environmentalist David Suzuki criticized the NDP opposition to the carbon tax. On Thursday, his foundation called the NDP policy a "practical and important step forward," but also added that there's a need for consistent increases in the rate of the tax.
B.C. Finance Minister Mike de Jong, responding to the NDP fiscal plan, took note of the change in course in the NDP's view on the carbon tax.
"Today's NDP approach to this represents something of a dramatic conversion on the road to the gas fields because it was just four years ago that Mr. Dix and the NDP ran an entire campaign opposed to the carbon tax, and yet here they are not only embracing it, but planning for its expansion, eliminating any notion of revenue neutrality," he told reporters in Surrey.
He said the fiscal plan lacked clarity on capital spending and the size of the deficit and might lead to a lowering in the credit rating.
In addition to an already-discussed increase of one percentage point in the corporate income tax rate from 11 to 12 per cent and a reinstatement of the corporate capital tax on financial institutions, the NDP is proposing an increase in personal income tax for high-income earners. Effective Jan. 1, 2014, the top 2 per cent of high-income earners in B.C. would see an increase on taxable individual income above $150,000, to 19 per cent.