British Columbia election: Conservatives say NDP is smuggling billions in carbon tax costs

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Days before the start of the election campaign last month, BC NDP Leader David Eby made a surprise announcement.

He would repeal the consumer carbon tax if Ottawa did so, a move highly expected if the poll-topping federal Conservatives, led by leader Pierre Poilievre, win the 2025 election.

Recognizing that a centerpiece of the platform would be a carbon tax burden on both consumers and industry, British Columbia Tory leader John Rustad wasted no time in striking back. He accused Eby of having a “secret” plan to keep the carbon tax alive by introducing a $3 billion backdoor scheme.

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Rustad said: “David Eby pretends his new tax will only apply to so-called ‘big polluters’, but the truth is it is a tax on everyone and everything. In reality, the costs will be passed on to ordinary Britons in the form of higher prices for goods, services and essentials.”

Rustad’s statements are misleading and require context.

It is true that a carbon tax will continue to burden industrial polluters, including the oil, gas and mining sectors. But Eby said he would continue to make sure big polluters pay their fair share, not the same as a secret $3 billion fee.

In fact, the province has just transitioned to a new carbon pricing system for industrial emitters, designed to ensure they remain globally competitive. According to the BC NDP’s 2024-25 budget documents, carbon tax revenues are expected to decline as a result of the transition to a new production-based pricing system.

Economist Marc Lee of the BC Center for Policy Alternatives says the plan would reduce industrial carbon tax revenues by $500 million this fiscal year.

BC Business Council chief economist Ken Peacock says he doesn’t know the exact amount, but agreed the new system would reduce tax revenue by the hundreds of millions of dollars.

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These expected revenue cuts do not point to a secret $3 billion fee, although producers’ costs could certainly fall on consumers, as Simon Fraser University economist Steeve Mongrain noted in a recent Postmedia News article.

There are other considerations in the broader context.

About $1 billion of the $2.6 billion in carbon taxes expected to be collected this fiscal year will go to households in the form of tax credits, with some of the rest going back to industry in the form of subsidies aimed at boosting emissions reductions.

This means that removing the consumer tax would hurt low-income individuals and families who get more in tax breaks than they spend on the carbon tax at the gas pump and on home heating.

There are still serious concerns about the impact of a carbon tax on the economy.

As the Vancouver Sun’s Vaughn Palmer wrote last year, the British Columbia government’s own modeling estimates that a rising carbon tax will have a significant negative impact on the economy.

British Columbia’s NDP government has vocally questioned how their modeling has been interpreted, with former British Columbia Environment Minister George Herman stating there have been changes that could offset or even exceed projected negative impacts, including in the clean energy and clean technology sectors.

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Read more BC election coverage throughout the campaign

• British Columbia election fact check: NDP says Conservatives will cut billions from health care

• BC Election Fact Check: Did David Eby Say “The Private Sector Plays No Role in Housing”?

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