B.C. to abolish its carbon tax, following new Prime Minister's move | Daily Hive

B.C. government to abolish its carbon tax after 17 years, following new Prime Minister's federal move

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The provincial carbon tax first imposed by the Government of British Columbia 17 years ago — and the first of its kind in North America — will be abolished.

B.C. Premier David Eby announced on Friday afternoon that the BC NDP-led provincial government will introduce new legislation following the move of Mark Carney, who signalled today — shortly after being sworn in as Canada’s new Prime Minister — that his federal government would scrap its equivalent tax. This was Carney’s first policy move as Canada’s leader.

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Both Eby and B.C. Conservatives leader John Rustad pledged to scrap the carbon tax during the Fall 2024 provincial election.

Similarly, during the federal Liberal Party’s recent leadership campaign, Mark Carney and other candidates vowed to eliminate the federal carbon tax, a policy also opposed by Pierre Poilievre, leader of the Conservative Party of Canada. This reverses a years-long direction touted by former Prime Minister Justin Trudeau.

The primary rationale for ending the consumer carbon tax at this time is to alleviate the additional costs borne by residents amid economic uncertainty, exacerbated by the Canada-U.S. trade war sparked by U.S. President Donald Trump’s tariffs.

“People in B.C. are doing everything they can to fight climate change. But we don’t want people to have to choose between affordability and climate action. That’s why we made the commitment last year to get rid of the consumer carbon tax at the first opportunity if the federal government removes the national carbon tax requirement,” said Eby in a statement.

“With Prime Minister Mark Carney moving to eliminate the federal carbon tax on consumers, we are preparing legislation for this session to repeal the tax in B.C. As the federal government removes the requirement that B.C. have a carbon tax in place, we will act quickly so the people of British Columbia don’t feel the pinch when filling their cars or heating their homes.”

B.C.’s carbon tax was applied to the purchase or use of fuels, such as gasoline, diesel, natural gas, heating fuel, propane, and coal. According to the provincial government, the carbon tax covered about 80% of provincial greenhouse gas emissions.

With the decision to kill the carbon tax completely, this also means the scheduled increase to the provincial carbon tax on April 1, 2025 will be cancelled.

According to the provincial government’s recently released 2025 budget, it was estimated that provincial carbon tax revenue would reach $2.56 billion in the 2024/2025 fiscal year, $4.03 billion in 2025/2026, $4.27 billion in 2026/2027, and $4.51 billion in 2027/2028.

Based on income levels, specifically low- and middle-incomes, eligible individuals and families received a carbon tax credit — a quarterly payment — to help offset the increased cost of living due to the carbon taxes paid. To sustain this credit, the provincial government spent $693 million in the 2023/2024 fiscal year, and budgeted $995 million in 2024/2025 and $1.03 billion in 2025/2026.

The provincial carbon tax was first introduced in 2008 by the then-BC Liberals provincial government led by Gordon Campbell.

“While we eliminate the consumer carbon tax, we will continue to ensure big industrial polluters pay their fair share by maintaining an effective price on carbon for large emitters. Our goal is to incentivize industry to adopt lower-carbon technologies while maintaining their competitiveness,” said Eby.

“The carbon tax has been an important tool in British Columbia. For over a decade and a half, a price on pollution has been an effective part of our efforts to tackle climate change. However, with cost-of-living pressures facing households and the imminent removal of federal carbon pricing, there is no longer support for the measure. We will continue our commitments to battle climate change by encouraging industry to innovate and ensuring British Columbians have affordable options to make sustainable choices.”

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