As B.C. consumers see carbon-tax savings, conservation group mourns policy

As B.C. consumers welcome lower gas prices, environmental groups are mourning the end of the consumer carbon tax.

As B.C. fuel prices plunge, an energy economist says consumers could see other – albeit limited – cost reductions in a post-carbon-tax world.

The provincial government eliminated the long-standing consumer carbon tax early Tuesday, aligning with the fall of the federal version of the tax.

“Transportation is used everywhere in the economy, so lower costs for transportation will spill over into other areas,” said Werner Antweiler, an economics professor at the University of British Columbia.

“It may take weeks before that shows up and it may be very little depending on the goods involved.”

While a significant amount of food is imported to B.C., Antweiler doesn’t believe grocery prices will drop dramatically.

“I would certainly expect those (businesses) that have lower input costs to try to keep as much of that as possible and not pass it on to consumers,” he said.

The B.C. Taxi Association indicated the money it saves on fuel won’t result in lower fares.

“It will be some help for the taxi driver to stay in the business,” said association president Mohan Kang. “There has to be a fine line where you can stand and… have the financial viability to continue to serve the general public.”

The more competitive a market is, the more likely cost savings are to be handed down to consumers, Antweiler said. He pointed to the airline industry as an example.

“There’s competition not only domestically, but also through international airlines that are operating here in Canada,” he said. “So we’ll see some of these (saving) effects getting passed on.”

‘Cheaper to pollute’

By Tuesday afternoon, fuel prices on Vancouver Island had plummeted. Gasoline was going for 160.4 cents a litre at an Esquimalt Chevron station, down from 178.9 cents the day before. At a Nanaimo Petro-Canada, fuel fell from 174.9 cents a litre to 155.9 cents.

While some motorists celebrate the savings, a B.C. conservation group is disappointed.

“Cancelling the price on carbon effectively makes it cheaper to pollute,” said Shelley Luce, associate director for Sierra Club B.C.

Consumers are losing an incentive to take public transit, drive more fuel-efficient cars, and use heat pumps in their homes, she said.

“B.C. needs to step up with new policies or improved policies to make sure that we are reducing our climate pollution,” she said.

“We were honestly considered a model for jurisdictions around the world. And that’s because everyone from economists to business leaders recognize and understand that a price on carbon is a fair and equitable way to accomplish the absolutely critical goal of reducing climate pollution.”

B.C. implemented its consumer carbon tax in 2008.