British Columbia carbon tax

In January 2010, the carbon tax was applied to biodiesel. Before the tax actually went into effect, the government of British Columbia sent out "rebate cheques" from expected revenues to all residents of British Columbia as of December 31, 2007.[8] In January 2013, the carbon tax was collecting about $1 billion each year which was used to lower other taxes in British Columbia. Terry Lake, the minister of the environment of British Columbia, said "It makes sense, it's simple, it's well accepted,"[9]

A July 2013 report by Sustainable Prosperity entitled BC's Carbon Tax Shift After Five Years: An Environmental (and Economic) Success Story suggested that the policy had been a major success. During the time the tax had been in place, fossil fuel consumption had dropped 17.4% per capita (and fallen by 18.8% relative to the rest of Canada). These reductions occurred across all the fuel types covered by the tax (not just vehicle fuel). BC's rate of economic growth (measured as GDP) kept pace with the rest of Canada's over that time. The tax shift enabled BC to have one of Canada's lowest income tax rates as of 2012. The aggregate effect of the tax shift was positive of taxpayers as a whole, in that cuts to income and other taxes exceeded carbon tax revenues by $500 million from 2008-12.[13]

This report was released to coincide with an internal review of the policy by the BC government, which ultimately decided to freeze the tax at 2012 levels for five years.[14] It was also aimed to influence energy policy discussion as the First Ministers met at Niagara-on-the-Lake, Ontario. Critics of the report debated its findings in media. Jock Finlayson of the BC Business Council pointed out that the drop in fuel consumption might be due to cross-border shopping, as many BC residents are able to drive into Washington or Alberta to fuel their cars and trucks, as well as to a much larger gasoline levy implemented Greater Vancouver (accounting for much of BC's population) to fund public transit development (TransLink), and that businesses were receiving less tax advantages from the plan than individuals.[15] Aldyen Donnelly of WDA Consulting suggested that the success of the tax in reducing fuel consumption would cannibalize the potential revenue it could generate, creating a tax waste, and that it fell more on the middle and lower-middle classes than on the rich, making it a regressive tax.[16] Supporter Mark Jaccard of Simon Fraser University, defended the tax by saying that BC's aviation fuel usage, which is not subject to the carbon tax, "did not diverge from the Canadian pattern, supporting the argument that the carbon tax really did have an effect. And BC's disconnect from the rest of the country was evident for all taxed fuels, not just gasoline; so the argument that BC's divergence is caused by increased cross-border shopping for gasoline is not supported." And further that, statistical analysis can factor out things like weather, background economic conditions, and other policies.[17]

Although fossil fuel consumption initially dropped rapidly, the recession in 2008 was also involved in lower consumption globally. A report in 2015 suggested an 8.5% reduction to date in greenhouse gas emissions, which may also be affected by cross border purchases of vehicle fuel.[18] Stats Canada reports that between 2007 and 2018 fuel consumption of Gasoline in British Columbia has increased by 5.2% while Canada as a whole 9.8%. [19]