The BC NDP government won a major court case last week, even though it was technically the latest ruling on a matter pitting Ottawa against several other provinces.
When the Ontario Court of Appeal ruled that the federal government’s proposed carbon tax is legal and constitutionally sound, it was a big boost to the Trudeau government’s plan to fight climate change. It was also a victory here in B.C., the birthplace of this country’s first carbon tax. B.C. had sought intervener status.
A steadily rising carbon tax is a key part of B.C.’s own plan. The tax is pegged at $35 per tonne of carbon dioxide emissions and the NDP plans to increase that tax by $5 a year until it hits at least $50 per tonne.
B.C. could find itself at an economic disadvantage if it was the only province with a carbon tax that kept growing. That is precisely the position right-leaning provinces, such as Alberta, Saskatchewan and Ontario, take. Its leaders are vehemently against it.
The Ontario court ruled Ottawa’s proposed carbon tax isn’t even really an actual tax. Rather, the court found, it is simply a regulatory charge tied to a desired outcome (in this case, reducing greenhouse gas emissions).
This part of the ruling is another potential gift to Premier John Horgan. It is conceivable the BC NDP now drops the word “tax” in its next budget and replaces it with “levy.”
The Ontario court ruling – which follows a similar one from the Saskatchewan Court of Appeal – pushes the BC NDP and the federal Liberals closer together on the climate action file.
The federal NDP and Greens both favour far more aggressive action, but Horgan and Trudeau – who face the challenges that come with governing, unlike their Opposition counterparts – prefer mastering the art of political compromise.
For now, B.C.’s carbon tax is not unpopular in this province. It certainly brings in a lot of money for the provincial government: an expected $1.7 billion this year, rising to more than $2 billion annually two years from now.
The tax used to be “revenue neutral” (it was originally tied to an income tax reduction), but it lost that status in the final years of the last BC Liberals government. The BC NDP has completely shredded any notion of revenue neutrality and now ties the tax to clean energy projects and transit – a political calculation that likely makes sense.
As we approach the federal fall election, Trudeau can understandably take considerable comfort in high court rulings backing a key part of his climate action strategy.
But standing right beside him is Horgan, happy to see their carbon tax position vindicated over the objections of their right-wing provincial colleagues.
Keith Baldrey is chief political reporter for Global BC.
