B.C. budget to include deficit, carbon tax

Tom Fletcher - BC Local News Published: February 16, 2009 12:00 PM

B.C. is sticking with its carbon tax program, and taxpayers will see in Tuesday's budget that on average they come out ahead on their taxes, Finance Minister Colin Hansen says. Hansen declined to comment on further tax cuts to offset the tax on fossil fuels that came into effect last year, but he indicated Monday that there would be no turning away from the strategy. "British Columbia is being recognized not only across Canada but North American-wide as a leader in its actions to address climate change, and that's an important part of the program," Hansen said.

The carbon tax took effect last July 1, adding 2.4 cents to a litre of gasoline and corresponding taxes on diesel, natural gas and coal. The tax is to rise each year, reaching 7.2 cents on a litre of gasoline by 2012, equivalent to $30 per tonne of carbon emissions. Originally projected to raise $1.8 billion over three years, carbon tax revenue has fallen along with other government income in step with the sharp decline in the economy since last fall. Hansen declined to comment on the size of the deficit before the budget is tabled in the legislature Tuesday, but he stuck to his prediction that the current fiscal year will end March 31 with the provincial books still in the black. There will be additional money for health, education and children and family development programs, and post-secondary spending will be maintained at current levels, he said.

All ministries have cut back on discretionary spending such as travel, advertising and outside consultants, and the money redirected to programs will be detailed in the budget. Hansen met with reporters for the traditional unveiling of the finance minister's new budget shoes. Instead of buying himself new shoes, or work boots to symbolize the infrastructure spending the government is undertaking, he donated $4,000 to the Salvation Army to buy new runners for needy kids around B.C. "I was moved by it," said Salvation Army Major Brian Venables. "It's not often that someone who's so busy takes the time to think of others." Hansen said the Sport Chek chain of sports stores did its part, providing 100 pairs of shoes at a discount that leaves the Salvation Army with money left over for related costs.

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Don Quixote Note: The Provincial Government promised to rebate the Carbon Tax Monies collected from July 1,2008 to Dec. 31,2008 to the local municipalities who signed the Carbon Tax Neutrality pledge. Vernon did so and this money will be coming back to Vernon in 2009 although the latest Municipal Budget has not acknowledged an estimate of how much money is expected. (Remember $165,000 = a 1% tax rate hike for general taxes)

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Vernon is responsible for invoicing the Province for the 2009 share of their Carbon Tax payments so they will have to develop an accounting system to ensure that they receive the correct amount each year from now on. (2008 estimate is based on the Provincve's estimate only.)