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October 2008

Vol. 13, No. 40 Week of October 05, 2008

B.C. premier budges on carbon taxes

Concession would reimburse municipalities for controversial levy if they pledge to cut greenhouse gases from operations by 2012

Gary Park

For Petroleum News

British Columbia Premier Gordon Campbell took a rare step Sept. 24 – he backed down under pressure by announcing a break on his controversial carbon tax, which kicked in July 1 at C2.34 cents per liter of gasoline and C2.69 cents per liter of diesel.

He startled the province’s municipal leaders by agreeing to rebate the tax to their governments so long as they signed on to a Climate Action Charter, pledging to become carbon neutral in their operations by 2012.

“If communities do that and publicly report on their plan and progress in meeting that goal, they will be eligible to receive a grant equal to 100 percent of their carbon tax costs,” Campbell said.

So far, 133 of British Columbia’s 189 local governments are committed to the charter and Susan Gimse, president of the Union of B.C. Municipalities, expects the rest will quickly climb on board.

Canadian Taxpayers Federation spokeswoman Maureen Bader said she was surprised and noted that it was the “very, very first time (Campbell) has ever backed down on anything to do with the carbon tax.

“Why has he backed down? It’s much more likely because of the upcoming election (scheduled for May 2009) as opposed to a rethink of the taxpayers’ ability to continue to fund these kinds of programs.

“It’s now become a confusing mess. We need a whole bureaucracy to manage all of this … so the taxpayer is going to be on the hook to fund these ever more burdensome and confusing programs,” Bader said.

Now the trucking industry, universities, health-care institutions and farmers are expected to join the clamor for a rebate.

If Campbell bows to that pressure, it will quickly erode his cherished goal of leading all North American jurisdictions by creating a “carbon neutral government,” while legislating an overall cut of 33 percent from 2007 greenhouse gas levels by 2020 and 80 percent by 2050.

The carbon tax is currently set at C$10 per metric ton of carbon dioxide equivalent emissions, rising annually by C$5 per metric ton to a peak of C$20, when it’s expected to add about 7.5 cents per liter to gasoline prices.

It is designed to show consumers and businesses that there is a cost associated with generating greenhouse gases.

Campbell insisted his concession to municipalities is not an exemption, arguing the governments will continue to pay the carbon tax, but will be reimbursed each spring, subject to legislative approval and provided they report on steps being taken to attain carbon neutrality.

Carole James, leader of the New Democratic Party, which polls indicate is closing the gap on Campbell’s Liberal government, said the premier “clearly panicked … he was feeling the heat. What we have seen is an acknowledgement that it is a bad tax.”

The municipalities’ union convention also stepped up opposition to a planned Shell Canada coalbed methane project, unanimously adopting a resolution urging Campbell to halt drilling in the so-called Sacred Headwaters region where the Skeena, Nass and Stikine rivers converge.

Hazelton Mayor Doug Donaldson said a “broad spectrum of people” find the Shell Canada project unacceptable, listing “red necks, commercial fishermen, sport fishermen, First Nations, municipal leaders, you name it …”

Shell Canada has drilled three wells since it was awarded tenure of the Klappan CBM deposit in 2004, but announced a temporary suspension in September to hold further discussions with First Nations communities.

A poll taken this year found 70 percent of northwestern B.C. residents opposed the exploration.

Petrobank Energy and Resources also has been forced to stop its drilling program in B.C.’s Interior, and BP Canada Energy has been waiting since February for the government to rule on its application to drill a deposit in southeastern B.C.






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