Timing is Everything
More than anything else, BC’s carbon tax is the victim of bad timing. Here’s the average gas price in Vancouver over the past year, according to the BC Gas Buddy:
Note that the BC Budget, which announced the carbon tax, was tabled on February 19, and the tax was implemented on July 1. In that time, prices at the pump went nothing but up. On or about Feb. 19 (by my eye), gas prices were about $1.11 per litre. By July 1, they peaked at mover $1.50 per litre (the carbon tax pushed it over the top, although it counted for a mere 2.34 cents per litre of the increase of almost 40 cents).
This backdrop of rising prices has arguably done way more than the carbon tax in terms of changing people’s behaviour. It has also led to massive windfall profits for oil companies. And yet the carbon tax has borne most of the brunt of public anger, even though all of it is recycled back through tax cuts (which were mostly a waste in my opinion) and a low-income credit (which more than compensates low- to modest-income folks for the the tax, on average anyway).
For the conspiratorially inclined, there is a great one to be written here of a cartel of oil companies savaging a carbon tax. Not me, though, I’m just pointing out the numbers.
Here’s the six-year trend in gas prices:
Going back to 2003, prices roughly doubled from then to the recent peak in early July. People have responded by changing their behaviour, but relative to that kind of increase, comparably little. Still, one gets the sense that public sentiment has turned the corner and a new rule-of-thumb has settled in that anticipates continued, even increasing, energy prices moving forward.
This is a good thing. Higher prices will make people change their behaviour moreso over time. But all of the concern over regressive impacts of a carbon tax need to be ported over to profit-taking on the part of oil companies. And I have yet to see any political leader knock this one out of the park in this election cycle.