Campbell defends carbon tax in wake of national report

B.C. Liberal Leader Gordon Campbell was forced to defend his government's carbon tax on the campaign trail Thursday after a national government advisory panel issued a report saying the tax isn't the way to go.

The National Round Table on the Environment and the Economy concluded in a lengthy report that hard caps on emissions and a scheme to trade them is a better alternative to a carbon tax.

The report noted that the carbon tax proposed by the federal Liberals in the last election was soundly defeated by voters.

But Campbell said his government is trying to do more than the report suggests needs to be done and a cap-and-trade approach simply won't accomplish that goal.

"What the report says is cap-and-trade is necessary, and if you read the report, they're calling for a 20 per cent reduction in greenhouse gases by 2020," Campbell said while on the election campaign trail in the province's northeast.

"We said in British Columbia it's going to be 33 per cent. We all support that. That's going to require not just a cap-and-trade, but a carbon tax."

As part of its green strategy, British Columbia introduced an escalating carbon tax last July that adds 2.4 cents a litre on the price of fossil fuels, including gasoline. The tax will increase to about eight cents per litre by 2012.

The province's green strategy also commits it to participating in a cap-and-trade scheme that has been endorsed by Quebec, Manitoba and Ontario and seven U.S. states.

NDP pounces

B.C. New Democratic Party Leader Carole James pounced on the federal report's nod in her party's direction.

James is campaigning on a promise to eliminate the carbon tax and replace it with participation in a cap-and-trade system — a position that has drawn the ire of many traditional NDP supporters in the environmental movement.

The report's authors "ruled out a carbon tax because they said it was important to have consistency and a level playing field across this country, and the way to do that is through cap-and-trade because that's the way people are heading," James said before a town hall meeting in Kamloops.

Later in the report, however, the authors offer praise to the B.C. approach, noting the province's carbon tax establishes certainty because the increases are legislated, but also offers flexibility because the rates can be adjusted after four years.

This is a key feature for effective, long-term climate policy that doesn't hinder investment, the report says.

Oil and gas sector

Campbell wore steel-toed work boots, coveralls and a hard hat to tour a natural-gas drilling rig during a campaign stop Thursday in Toms Lake, in the heart of oil and gas country.

He noted the oil and gas sector has created 34,000 jobs since 2001 when the Liberals took office, and he attacked NDP plans to tax gas flaring.

He said the oil and gas sector is a huge wealth generator in the province, with land lease sales that amassed $2.6 billion in revenues last year and another $1 billion in royalties.

The Liberal leader said the industry is an innovator in designing clean technology for the energy sector, but taxing gas flaring will hurt the industry during tough times.

At a later campaign stop in Fort St. John, Campbell told about 200 supporters that the gas-flaring tax will cost the industry about $400 million at a time when it's already feeling the economic pinch.

He said the Liberals plan to cut flaring by 50 per cent by 2011 and to have zero gas flaring by 2016.

A spokesman for EnCana, the major industry player in the area, said the company is working to eliminate flaring.

Richard Dunn estimated his company will pay up to $5 million in carbon taxes to the government — a levy he said the company can live with if everybody pays their share.

But James said the controversial tax is taking money out of the pockets of regular British Columbians.

She said it adds up to $300 in fuel costs per year for the average family. She's promised to scrap the environmental levy if elected, saving taxpayers and business in B.C. $1.8 billion over the next 2½ years.

"His plan hits families struggling to make ends meet and businesses trying to make a profit in the recession," James said of Campbell's platform.

She later told reporters that flaring taxes have been implemented in other jurisdictions, including Alberta and Texas.

During a town hall meeting Thursday night, James told about 50 supporters that Campbell has abandoned the forestry industry.

"I've been here too many times talking to forest workers who have lost their jobs," she said.

James said she has also spoken to teachers who've told her about the number of empty lockers inside schools as families leave to try and find work.