Climate inaction and BC's budget

March 3, 2010

The 2010 BC Budget was a disappointment on the climate action front. Even as Premier Campbell waxed poetic in the Globe about the impact of climate change on the “Spring Olympics” – with its sunny days, crocuses, daffodils and cherry blossoms making it fun for people on the street but a big mess up at Cypress Bowl – the budget offered little assurance that this government still cares.

Instead, the budget is best symbolized by the Olympic flame, whose massive size and burning cauldrons make a fitting monument to the oil and gas industry, a testament to our brazen determination to burn fossil fuels.

Subsidies to the oil and gas industry remain untouched in the budget, and royalties paid by the sector are half of levels in previous years, in part due to royalty reductions from last August's "oil and gas stimulus package" (like they really needed it). In addition, in the budget's transportation investment plan, 86% of provincial funds go to roads and bridges, including favoured projects like the Gateway highway expansion program and the "oil and gas rural road improvement program."

There was some expectation that the government would announce a plan for the BC carbon tax, which hits $30 a tonne in July 2012, then hits a wall. If I were a businessperson in BC, I would want to know the outlook post-2012 and what this meant for capital investments in the near term. But there was silence on that front, and no mention of extending the tax to cover major sectors not currently covered by the tax, like aluminum, cement, lime, and (you knew this was coming) much of the oil and gas industry.

From a climate justice perspective (i.e. making sure that climate change initiatives don’t have an unfair impact), it’s troubling that the budget includes no increases to the low-income carbon tax credit, which more than offset the carbon tax for the bottom 40% of income earners in year one (starting July 1, 2008), and roughly neutralized it in year two. The growth of the credit is not keeping up with the growth in the tax, and will make the overall regime regressive as of July 1, 2010 – thus placing a greater burden on low-income folks who have done the least to contribute to the problem in the first place.

Since its inception, the carbon tax and revenue recycling regime was regressive at the top, meaning the top 20% of income earners get back more in tax cuts than they pay in carbon tax. The government's unwavering commitment to use carbon tax revenues to fund personal and corporate tax cuts, which are not needed and which will have essentially no economic impact, comes at the expense of measures that really would change behaviour, like improvements to public transit (the latter being a fascinating experiment and positive outcome of the Olympics). True, the government has put in funds for the Evergreen line, but it’s also hamstrung Translink's ability to raise funds to actually get the project off the ground.

The budget does breathe some new life into LiveSmart, a program for energy efficiency upgrades that ran out of money last year when it was oversubscribed. The budget provides new money of $35 million over three years, which is better than nothing but rather small. It is a lost opportunity, given that unemployment rates are double what they were a year ago, and this program develops green jobs. There are also some flaws in the program that still need to be fixed; for example, it encourages use of natural gas furnaces and hot water heaters that produce the greenhouse gas carbon dioxide.

The budget commits $100 million over three years to vaguely defined "climate action and clean energy," which is linked to an upcoming Clean Energy Act to be tabled this sitting. The Act has many concerned about the province running roughshod over local interests to ramp up private power production for export to the US (perhaps in conjunction with a new deal signed by Campbell and Schwarzenegger during the Olympics). The budget states that this money will be used to support investments (read: subsidize the private sector) in biofuel production, new electricity generation and "infrastructure to support cleaner transportation choices." While some of this may be a useful contribution, we will have to wait for more details when the new legislation is tabled.

So overall, we need some regime change on the climate front if BC is to live up to its rhetoric and awards from environmental groups.

Marc Lee is the Senior Economist at the CCPA’s BC Office and Co-Director of the Climate Justice Project, a research partnership with UBC's School of Community and Regional Planning that examines the links between climate change policies and social justice.