Carbon Tax not revenue neutural: Fraser Institute

A report from the Fraser Institute says British Columbia’s carbon tax is no longer revenue neutral.

VANCOUVER — A report from the Fraser Institute says British Columbia’s carbon tax is no longer revenue neutral.

The study, co-authored by Charles Lammam, director of fiscal studies at the right-wing research institute, says the B.C. government no longer cuts other taxes to roughly equal new revenues from the carbon tax.

Without that offset, the study finds the province is collecting millions of dollars of additional funds from taxpayers, which Lammam says violates the government’s commitment that the tax would remain revenue neutral. The study says the tax was revenue neutral up until 2013, when the government stopped providing new cuts to offset the additional carbon tax revenue that it was collecting.

Once the pre-existing tax reductions are excluded, the Fraser Institute says B.C. taxpayers paid $226 million in increased taxes in 2013-2014 and $151 million in increased taxes in 2014-2015.

No one from the B.C. government was immediately available to comment on the study’s findings.

The study says the B.C. tax is often praised as a model for other jurisdictions to follow because of its alleged revenue neutrality.

“The B.C. government has effectively raised taxes by hundreds of millions of dollars without British Columbians even knowing about it,” says Lammam in a release.

The carbon tax is being considered as a potential model across Canada, but Lammam says it must no longer be considered revenue neutral because the government’s own projections show a cumulative $865 million tax increase on British Columbians between 2013-2014 and 2018-2019.

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