On Canada Day, British Columbians will be paying 2.5 cents to a liter of fuel because of a new provincial carbon tax passed by the Liberal government. Effective July 1, the carbon tax will be phased in over five years to give consumers and businesses time to adjust and begin to understand there is a cost associated with generating harmful greenhouse gases.
The carbon tax starts at a rate based on $10 per tonne of carbon emissions and rises $5 a year to $30 per tonne by 2012. The tax works out to an extra 2.4 cents a liter on gasoline, rising to 7.24 cents per liter by 2012.
The tax is being billed as revenue neutral, meaning the government will not use money generated from the tax to fill its coffers. The revenue, estimated to hit $1.8 billion over three years, will be returned to taxpayers through personal income tax and business tax cuts.